Cyprus Mines OK’d to query insurer-backed candidates to rep future claimants

The sign is seen at the U.S. Bankruptcy Court for the Southern Borough of New York in Manhattan, New York City, United States on August 24, 2020. REUTERS / Andrew Kelly

Former talk miner Cyprus Mines Corp has two insurers proposed candidates to represent the interests of people who could bring future talk-related claims into the company’s bankruptcy, a judge overseeing the case ruled Monday.

During a virtual status conference, US bankruptcy judge Laurie Selber Silverstein signed in Wilmington, Delaware, Cyprus’s motion, represented by Reed Smith, for brief statements by the two insurer-sponsored candidates for the future claims representative (FCR) role in its Chapter 11 case. Her decision comes a few weeks before a June 2nd hearing asking her to choose between three people for the role.

Cyprus filed for bankruptcy in February as part of a settlement with another bankrupt talc company, Imerys Talc America Inc, which acquired some of its talc assets in 1992. Cyprus is one of the companies sued by plaintiffs in recent years for alleged link between exposure to talc products and certain types of cancer and asbestos-related diseases.

While the company has faced hundreds of lawsuits claiming personal injury related to Talk, it is aiming to appoint an FCR to represent those who may have claims but may not currently know them. FCRs are regularly present in mass bankruptcies related to tort.

Cyprus has selected Roger Frankel as the preferred candidate for the position. Frankel has acted as FCR in several other tort-related bankruptcies, including the ongoing case of opioid manufacturer Mallinckrodt Plc.

However, a group of insurers that may be able to cover personal injury against Cyprus say that there is an inherent conflict if the FCR is chosen by the bankrupt as the FCR’s role should be detrimental to the company. The insurers, represented by O’Melveny & Myers, are calling on Silverstein to appoint former Delaware State Judge Peggy Ableman or retired California bankruptcy judge Randall Newsome to take on the role.

However, Cyprus argues that it should be able to consult Ableman and Newsome about their experience with tort claimants in any capacity, as well as litigation related to asbestos. The company has argued that Ableman could potentially run into a conflict because she worked for a defense firm filing lawsuits against asbestos and talc applicants, and that Newsome has no relevant experience.

During Monday’s status conference, O’Melveny’s Tancred Schiavoni denied the company’s claims that Newsome had no relevant experience, saying it had made a nomination and self-appointed FCRs in an asbestos-related case in Delaware.

Silverstein was unaffected by Cyprus’ arguments on Monday, but agreed that his lawyers should sit down Ableman and Newsome for three hours each in order to streamline the June 2nd hearing.

“A lack of experience in and of itself doesn’t disqualify you,” she said.

Prior to filing for bankruptcy, Cyprus reached an agreement with Imerys that agreed to deposit $ 130 million in Imerys’ trust for personal injury claimants. The deal resolves insurance policy disputes related to asbestos injury disputes.

The case is In re Cyprus Mines Corporation, US Bankruptcy Court, Delaware District, No. 21-10398.

For Cyprus: Kurt Gwynne, Jason Angelo, Paul Singer and Luke Sizemore from Reed Smith

For the insurers: Tancred Schiavoni and Janine Panchok-Berry from O’Melveny & Myers; and Stamatios Stamoulis from Stamoulis & Weinblatt

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