Closing the Bankruptcy Loophole and Protecting Victims' Right to Sue
When people are harmed by a company's products, their right to pursue legal action shouldn't disappear because that company files for bankruptcy. But a recent federal appeals court decision threatens that principle.
In Official Committee of Talc Claimants v. Whittaker, Clark & Daniels, Inc., individuals who developed mesothelioma allegedly linked to asbestos-contaminated talc sought to hold a successor company, Brenntag, accountable. After the original company filed for bankruptcy, the court ruled that the victims' claims against Brenntag belonged to the bankrupt company's estate, allowing those claims to be settled without their consent.
WHEN Justice has filed an amicus brief supporting the claimants' petition for Supreme Court review.
Our argument is straightforward: The right to seek compensation for personal injury belongs to the person who was harmed. Bankruptcy law should not allow a company to take ownership of that right and bargain it away.
The implications extend well beyond this case. If the decision stands, it could create a pathway for corporations to use bankruptcy proceedings to shield other, financially solvent companies from legal accountability for toxic exposure, defective products, and other harms.
Through our Litigation Lab, we're working to protect the legal pathways that allow people to hold corporations accountable and challenge interpretations of the law that threaten to close them.
Read WHEN Justice's amicus brief