WORK WE’VE DONE: CASE STUDIES

Resolving corporate asbestos liability

No longer able to bear the cost of asbestos-related legal claims, an industrial manufacturer pre-negotiated a Chapter 11 plan, including creation of a 524(g) trust, with key members of the plaintiffs bar. The company’s ultimately successful legal strategy was reinforced by extensive stakeholder communications.

Client Challenge: Permanently resolve asbestos liability through a 524(g) trust

After enduring years of increasing costs for defending and paying asbestos-related personal injury claims, a small industrial manufacturer attempted to permanently resolve its asbestos liability by filing for Chapter 11 protection. To improve its odds of quickly emerging from bankruptcy, the company prenegotiated the plan, which included creation of a 524(g) trust, with key members of the plaintiffs bar. Would its thousands of asbestos claimants accept the plan?

Sharon Merrill Approach: Reinforce legal strategy with outreach to key constituencies

Working closely with the client’s legal team, Sharon Merrill helped management execute a series of stakeholder outreach activities designed to engender broad support for the company’s strategy and improve the odds for an efficient resolution of the Chapter 11 process. These activities directly targeted internal and external constituencies, including company employees, customers and vendors, as well as external audiences including the business media and government regulators, as well as the asbestos claimants.

Results: Efficient and successful resolution of all current and future asbestos claims

The company emerged from bankruptcy with its reputation and business momentum intact within a short eight months of its initial Chapter 11 filing. Management’s ability to tap the goodwill of key stakeholder groups was crucial to its success in navigating the legal minefield of a complicated bankruptcy. During the process, management earned a reputation for exceptional transparency and was credited by internal and external stakeholders for considering their interests fairly while resolving a life-threatening corporate challenge.