Developing Best Practices to Improve Mass-Tort MDL-Bankruptcy Procedures
Developing Best practcies to Improve Mass-Tort MDL-Bankruptcy Procedures
October 26, 2022
The defendants in several major MDL litigations have filed for bankruptcy. The status of the bankruptcies is unclear, and a final resolution may await Supreme Court consideration. In the meantime, the bankruptcies proceed with little guidance on procedures governing the treatment of the work done by tort lawyers in the MDL and how the hand-off from tort lawyers to bankruptcy lawyers is to be managed. The interaction between the two raises many unanswered procedural questions.
The Center is forming a team of experienced practitioners and judges to develop best practices, which will provide the guidance needed to handle these actions more fairly and efficiently.
Preliminary study has identified the following potential issues for the team to address:
the voting rights of tort claimants with questionable or modest claims compared to those with large claims in determining the 75% agreement threshold
representation of the tort lawyers’ interests in any tort claimant-creditor committee established in bankruptcy
the treatment of the tort lawyers’ initial funding of the litigation in a bankruptcy (plaintiff steering committee typically expends $10-$20 million upfront to meet immediate MDL litigation expenses)
the extension of the automatic stay/request for injunctive relief against third parties, including co-defendants
the varying roles and methods of claims estimation throughout the case
the standing and proper extent of insurers’ participation, and
post confirmation governance under the TDP’s and trust structures.
The team may raise other issues for consideration.
Team roles include drafters of language, editors, and reviewers. If you are interested in joining the team of volunteers, please advise the Center at Contact@rabiejcenter.org.