Document DdYD8vKN8ppa6EB2Maa18qx4O

FILE NAME Manhattan RBM DATE 1988 DOC RBM045 DOCUMENT DESCRIPTION Legal - Case Report - Schmoll vs. Acands Inc. 868 708 FEDERAL SUPPLEMENT D. Public Policy 5 Under the public policy exception to the employment doctrine plaintiff must prove that termination of his employ ment violates a clear mandate of public policy See Parnar 65 Haw at 874 662 P.2d 625. Plaintiff argues that his termi- nation violates his constitutional rights to freedom of speech and privacy The court finds plaintiff's arguments unavailing In creating the public policy exception to the employment doctrine the Hawall Supreme Court quoted from Petermann v International Brotherhood of Teamsters 174 Cal.App.2d 184 844 P.2d 25 1959 " stating tha the term public policy may comprehend that which has a tendency to be injurious to the public or against the public good and whatever contravenes good morals or any established interests of society ... Parnar 65 Haw at 878 652 P.2d 625. Plaintiff has failed to present any arguments or authority to support his _ assertion that a barrage of profanities at a company picnic is for the public good or in the interests of society The court does not find that the values of freedom of speech or privacy are promoted by this kind of behavior Thus the court finds as a matter of law that the defendant did not violate any clear mandate of public policy by terminating plaintiff for profanity and insubordination There being no issue of fact with respect to violation of public policy defendant's motion for summary judgment is GRANTED on that claim E. Emotional Distress Plaintiff's claim for emotional distress is based upon his claim of wrongful termi nation Since this court finds that there are no genuine issues of material fact with respect to plaintiff's claim of wrongful termination plaintiff has no basis for his claim of emotional distress Accordingly summary judgment is GRANTED on this claim CONCLUSION The court finds that there is no genuine issue of material fact with respect to plaintiff's claim for wrongful termination in breach of an implied contract or in violation of public policy The court fur ther finds that there is no genuine issue of material fact with respect to plaintiff claim for emotional distress Accordingly summary judgment is granted in favor of defendant IT IS SO ORDERED Raymond A. SCHMOLL Plaintiff V. ACANDS INC & Pennsylvania Corporation et al Defendants Civ No. 86-1813 United States District Court D. Oregon Dec. 23 1988 Plaintiff brought products liability ac tion against corporation and holding com pany for asbestos related injury allegedly caused by corporation's production sale and distribution of products containing ** bestos The District Court Panner Chief Judge held that holding company which was entirely owned by former shareholders liability of corporation was successor in and was responsible for corporation's strict liability torts So ordered 1. Corporations 445.1 590 pur As general rule when corporation chases all or most of assets of another does corporation purchasing corporation not assume debts and liabilities of sellingselling corporation however purchasing corpora tion may be responsible for selling corpora corporation corporation tion's obligations if purchasing assume expressly or impliedly agrees to assume those liabilities transaction amounts consolidation or merger of corporations selling corporation transaction to escal 1. Corporations Holding comps former shareholder tion which was inv ty litigation arising and distribution of was successor in Hi sible for corporation although corporate sulted formation met technical forms it was designed fo escaping asbestos i Jeffrey S. Mutnic Wilson Atchison O land Or for plaint "lars N. Reed kudlan kudlan & Steni liam D. Okrent Smith Smith Portland Or OP PANNER Chief Plaintiff Raymon products liability a Industries Inc. and Raytech The issu liable as fi success tries production production 61 products containing Raytech is a succes mark industries defendants seeks da defendants includir and Raytech for in by inhaling asbest manufactured or so parties stipulated to ceedings and agreed the question wheth in liability to 1. Until 1982 Rayma changed Manhattar in changed as part of th ent which Raymark C and sole sharehol XI SYTTHC XI SYTTHXCI SYTTHC * dana 8 OOXU 89:07 06 22 NOI ne court furuine issue of to plaintiff's in favor of Plaintiff ylvania idants 1 Court Hability ac olding cor y alle .- iction aale taining asnner Chief any which areholders in liability ion's strict ] ration pur of another ition does of selling g corporag corpora orporation o assume ounts to porations SCHMOLL v ACandS INC Ciat s 7e 03 F.Supp 868 D.Or. 1988 869 purchasing corporation is continuation of selling corporation or corporations enter transaction to escape liability 2. Corporations 445.1 Holding company entirely owned by former shareholders of another corporation which was involved in products liabili- ty litigation arising out of production sale and distribution of its asbestos products was successor in liability and was respon- sible for corporation's strict ability torts although corporate restructuring which re- sulted in formation of holding company met technical formalities of corporate form i wae designed for improper purpose of escaping asbestos related liabilities Plaintiff and Raytech have submitted thousands of pages of documents and deposi tion transcripta covering a variety of corporate transactions from 1982 through 1988. The parties agreed that I would base my decision upon the briefs and depo- sitions and exhibits cited in the briefs Background Raymark Industries manufactured and distributed energy absorption and transmission products including asbestos and containing products Since the early 1970's Raymark Industries has been named in an increasing number of asbestos related personal injury law suits By June 26 1988 Raymark Indus tries had been named as a defendant in Jeffrey S. Mutnick Henry Kantor Pozzi Wilson Atchison O'Leary & Conboy Port- more than 68,000 cases Approximately 1,000 new cases are filed each month land Or for plaintiff William N. Reed Donald R. Jones Wat Raymark Industries has suffered severe financial declines as a result of the asbes- kins Ludlan & Stennis Jackson Miss William D. Okrent Acker Underwood & Smith Portland Or for defendants tos litigation In 1981 Raymark Corporation had a net worth of 112.4 million By 198 :> reported net worth of the compa- OPINION ny he dropped to 8.6 million Between 1982 and 1988 Raymark Corporation reor PANNER Chief Judge ganized ita corporate structure in response Plaintiff Raymond Schmoll brings this products liability action against Raymark Industries Inc. and Raytech Corporation to this financial decline Raymark told its shareholders that the corporate restructur ing would Raytech The issue is whether Raytech is permit the Company to gain access to liable as a successor for Raymark Indus- sources of capital and borrowed funds tries production sale and distribution of and thereby finance the acquisition and products containing asbestos I find that operation of new businesses unrelated to Raytech is a successor in liability to Ray- Raymark Corporation in a corporate mark Industries structure that should not subject the Plaintiff seeks damages against multiple defendants including Raymark Industries and Raytech for injuries allegedly caused holding compr nesses to a - or such acquired busi- related liabilities of Raymark Cordon Cordon by inhaling asbestos dust from products The corporate ucturing involved a manufactured or sold by defendants The complex se of ransactions that trans- parties stipulated to bifurcation of the proceedings and agreed to submit to the court the question whether Raytech is a successor in liability to Raymark Industries formed Manhattan into Ray mark Industries and Raytech The steps of this restructuring s-- diagrammed and described below 1. Until 1982 Raymark Industries was called Manhattan Inc. The name was changed as part of the corporate reorganization in which Raymark Corporation became the par ent and sole shareholder of Raymark Industries 2. The corporate structure and reorganization will be discussed in detail at a later point However for clarification Raymark Corporation was a holding company and operated through its subsidiary Raymark Industries 870 708 FEDERAL SUPPLEMENT MANHATTAN RAYBESTOS RAYMARK CORPORATION | RAYMARK INDUSTRIES RAYBESTOS | WET CLUTCH & BRAKE DRY CLUTCH & BRAKE RIPG M FORMED PRODUCTS DAIKIN STEP 1 Manhattan Raybes tos originally organized as a New Jersey corporation in 1929 was reorganized as a Connecticut corporation in 1976. In 1982 Manhattan changed its name to Raymark Industries and created Raymark Corporation as a holding company for Ray- mark Industries Raymark Corporation's only asset was the stock of Raymark In- dustries In 1985 Raymark Industries assets included two operating divisions Wet Clutch & Brake WC & B and Dry Clutch & Brake DC & B the stock of a German subsidiary Raybestos Industrie G.m.b.H. RIPG the stock of a shell cor poration M Formed Products and a 50 interest in a foreign joint venture Daiken WC RAYMARK CORPORATION l RAYMARK INDUSTRIES RAYBESTOS i DC RIPG M DAIKIN RAYTECH STEP 2 In June 1986 Raymark Corpo- ration created Raytech as a wholly owned subsidiary RAYMARK CORPORATION WC RAYMARK RAYMARK INDUSTRIES RAYBESTOS } DC RIPG M DAIKIN RAYTECH RAYSUB tion Rayte the stock of RAY DC STEP 5 188 the and RIPG Wet Clutch million P mately 15 worth of 1 another 86 red later notes The the largest & WC STEP 8 Raytech then created Raysub as a wholly owned subsidiary Raytech and Raysub were created solely to carry out the merger described in the next step RAYTECH RAYMARK CORPORATION INDUSTRIES RAYMARK INDUSTRIES RAYBESTOS WC DC | RIPG | M DAIKIN STEP 4 In October 1986 Raymark Cor- poration merged into Raysub with Ray mark Corporation surviving as a wholly owned subsidiary of Raytech In this merger each outstanding share of Ray- mark common stock was converted into one share of Raytech stock Raytech endtierseilgy nated the holding company was owned by the former shareholders of Ray mark Corporation As a result of Raysub merger Raytech the parent of Raysub became the parent of Raymark Corpors 50 50 * ->0N8% NONE 00 06. 22 NOV AYTECH RAYSUB reated solely to carry ribed in the next step DAIKIN ck Raytech desigmpany was entirely shareholders of RayAs a result of this parent of Raysub Raymark Corpors SCHMOLL v ACandS INC 871 a Cit7e 03 F.Supp 868 D.Or. 1988 stockRaytech then owned 100 percent of xon of Raymark Corporation which stock the owned 100 percent of the stock of Raymark Industries RAYTECH r RAYMARK CORPORATION l WC WC RIPG RAYMARK INDUSTRIES RAYBESTOS | DC M DAIKIN 5 In 1987 Raytech purchased SSTTEPEP Raymark Industries two most profitable Wet Clutch and Brake Division aRssaetys mark stock Raytech purchased the RIPG and Clutch and Brake Division for 76.9 Wet Payment consisted of approxi- another unsecured 15 million in cash 10 million worth of Raytech stock at closing with worth another 86 million in stock to be transfer later and 46 million in The Wet Clutch and Brake Division the largest of Raymark Industries busi- RAYTECH i WC RIPG ness operations had significant profit po- tential Furthermore the asbestos claims against Raymark Industries did not arise from the Wet Clutch and Brake Division Raytech also purchased the RIPG stock owned by Raymark Industries for 8.2 mil- lion RIPG does not manufacture or sell its asbestos products in the United States and has never been named in asbestos lated litigation Terms of the sale included a cash payment of 8.9 million with the balance financed by an unsecured note LITIGATION CONTROL CORP ASBESTOS LITIGATION MANAGEMENT RAYMARK CORPORATION RAYMARK INDUSTRIES i DC M DAIKIN STEP 6 In 1988 Raytech sold Raymark Corporation and thus Raymark Industries to Asbestos Litigation Management ALM for $ million ALM paid 50,000 in cash and a 950,000 unsecured promissory note for all Raymark Corporation's assets and Liabilities ALM is a wholly owned subsidiary of Litigation Control Corporation LCC 1. Though stock transferred to Raymark had an apparent market value of 10 million it is un- likely that Raymark could have sold those shares attempt anything approaching large blocks of these by Raymark to market large blocks would have had a devastating shares on the of Raytech shares Dr. Al- effect price Fitzpatrick plaintiff's business expert stat- ed that Raymark probably would have had to 90 discount in order to sell these , whose business includes claims processing document control and retention and other services to companies involved in complex litigation ALM serves only companies defending asbestos litigation ALM now owns the stock of Raymark Corporation whose only asset is Raymark Industries stock 4. Of the portfolio of businesses owned by Ray- mark Industries the Wet Clutch and Brake divi sion was the best current performer in 1986 5. The Wet Clutch division purchased asbestos paper as a component of products but the asbes tos paper operated in an immersed environ- ment XI'SXIH'SHTITVO IXI'VSHTOIVO * Q ->NG NOAH TO IT 06 872 708 FEDERAL SUPPLEMENT As a result of this involved corporate ration or 4 the corporations enter the restructuring Raytech now owns WC & B and RIPG the two historically lucrative businesses of Raymark Industries without transaction to escape liability Id see also Dairy Coop Ass'n v Brandes Creamery 147 Or 488 496 80 P.2d 388 the drain of asbestos litigation By 341 1984 successor corporation liable for selling the stock of Raymark Corporation Raytech was able to dispose of a subsidiary whose asbestos expenses had de contractual debt of its predecessor because successor formed solely to escape liability Peterson v Harville 445 F.Supp 16 24 creased its earnings by 8.6 million during D.Or.1977 applying Oregon law aff'd i the first quarter of 1988 628 F.2d 611 9th Cir.1980 i ! Oregon courts reject transfers of corpo- Discussion rate assets designed to escape liability In this action plaintiff seeks to hold Ray- For example in Dairy Coop a cooperative tech liable for Raymark Industries produc tion sale and distribution of asbestos taining products Plaintiff contends that for purposes of liability Raytech and Raymark Industries are the same corporate entity Defendant Raytech argues that as an innocent successor corporation it sought to enforce an exclusive marketing contract against the corporate successor of Brandes Creamery a milk distributor Brandes Creamery had dissolved and a new corporation Brandes Creamery Inc. was formed in its place The court held Brandes Creamery Inc. liable for Brandes should not be liable for the acts or omis- sions of its predecessors Creamery's contracts noting that the dissolution of Brandes Creamery and I have found no reported case quite like this case This is not surprising Plain- tiff's business expert testified that he thought this case involves the first corporate restructuring of its kind Raymark Corporation told its shareholders that the transformation was novel Defendants the organization of Brandes Creamery Inc. had but one purpose and that was to avoid the contractual liability of Brandes in Creamery arising from the contract suit In this state of the record equity will look through the form at the sub- stance and their counsel have engineered an elaborate apparently unique transfer of corporate assets carefully preserving the ap pearance of an length transaction be tween separate corporations 1 As general rule when a corporation purchases all or most of the assets of another corporation the purchasing corpo- ration does not assume the debts and liabil- ities of the selling corporation Erickson v Grande Ronde Lumber Co. 162 Or 556 568 92 P.2d 170 174 94 P.2d 189 1989 However the purchasing corporation may be responsible for the selling corporation's obligations if 1 the purchasing corporation expressly or impliedly agrees to as- sume those liabilities 2 the transaction amounts to a consolidation or merger of the corporations 8 the purchasing corporation is a continuation of the selling corpo- 147 Or at 496 80 P.2d at 841 The Raymark Industries asset transfer does not precisely parallel the transaction rejected in Dairy Coop How ever Dairy Coop highlights two impor di- tant principles of Oregon law that are rectly applicable First that case shows the Oregon courts are more concerned the substance of a transaction than its ticular form Second Oregon law rejects corporate restructuring carried out toea cape liability Peterson also illustrates those principles In Peterson the plaintiffs loaned 100,000 to Oceanic Inc. a corporation whose princi a land pal asset was land sale contract land Inc. assigned its interest in the immediately immediately contract to its president who immediately assigned that interest to Oceanic Develop ment a newly created corporation 6. This is a diversity action The parties agree that Oregon law applies because the defendants alleged tortious acts took place in Oregon turn the presid liabilities How was already pe Inc.'s debts the effect of the ov the land was t valuable asset and the credit nothing 445 equitable powe Development t able for Ocean The result of case is similar mark Industrie and Wet Clut these assets to by Raymark In ers This tran~- tries with stas unprofitable o and stock whic end Bi blocks without ee Present and creditors were the transaction for Raymark | assets will n present and fu escapes liabilit torts these cr access to Rayr sete or to the generated by - In the prese corporate rest pants stateme 7. A consolidat tries involving rently pendin Court pendin pendin verdict in that Industries ins Presentl Executive Offi XL * * -> ->&NENOXU TI 06 SIERRA CLUB v ELECTRONIC CONTROLS DESIGN Ciat s 7e 03 F.Supp 875 D.Or. 1989 875 afy its asbes l'pholdinlg'pholl'dpinhgolding quitable con- stance on American posed to sig- sig- at the work find a more have eltzer Puni nies would tions to avoid such responsibility seeking the integrity of such transac unjustly elevate form over sub Conclusion find that Raytech is a successor in I to Raymark Industries for Rayproduction sale and dis et seq 809 33 U.S.C.A. 1251 et seq 1819(d). 2. Federal Civil Procedure 2397.3 Consent decree settling dispute under Clean Water Act was at odds with Act and would not be approved money to be paid under settlement was scheduled to go to private organizations rather than federal treasury as required by the Act in that Litigation ..abilityIndustries Fairnes products mark of containing asbestos decree provided for payment of money to mera nbution Raytech is responsible for Ray- nonprofit organization as trustee which in wer nbution dham L.Rev Therefore , Therefore Raytech torts, This opinion is turn would distribute money to designated meas thousands of findings Therefore of fact and conclconuclussioins ons ofoflaw private nonprofit environmental organiza- amt . asbestosre- my findings tions and Act did not authorize any private party to recover damages for violations of Asbestos the Act Federal Water Pollution Control Chapter 11 Act Amendment of 1972 101 et seq 801 809 505 d 38 U.S.C.A. uits are filed 1251 et seq 1811 1819 1865 d mark Indus wing Johns ille lead by - in effect at Borganization e protections cember 1986 Court for the i confirmed a anville The y trust of 3 3 present and isbestos inju- Manville osure State estated Plan 1 Documents 82 B 11660 5 82 B 11676 36 aymark Cor asbestos lia other compa tark Industries ate actions in iffs In 1984 month Ray Itional filings 51,200 cases involved in the tion Asbestos ) SIERRA CLUB INC Plaintiff V. ELECTRONIC CONTROLS DESIGN INC Defendant Civ No. 87-905 United States District Court D. Oregon Jan. 6 1989 United States objected to proposed consent judgment settling dispute under Clean Water Act The District Court Marsh J. beid that consent decree which required payment of civil penalties to private orga" nization was in direct countervention of Act and would not be approved Ordered accordingly 3. Compromise and Settlement 58 While parties are given fashioning their own remedy seeks to enforce a statute latitude in where suit settlement terms must be in accordance with congres- sional goals of statute Victor M. Sher Todd D. True Corrie J. Yackulic Sierra Club Legal Defense Fund Inc. Seattle Wash Richard A. Parrish Portland Or for plaintiff Richard S. Gleason Steven Stoel Rives Boley Jones & land Or for defendant L. Pfeiffer Grey Port- Roger J. Marzulla Asst Atty Gen. Charles J. Sheehan Atty Land & Natural Resources Div Policy Legislation and Sp Litigation Section Washington D.C. Charles H. Turner Thomas C. Lee U.S. Atty.'s Office Portland Or for U.S. OPINION 1. Federal Courts 218 District court's jurisdiction to entertain stisen action under Clean Water Act is limited to enforcing effluent standard or imitation ordering Administrator to per forming nondiscretionary act and imposing civil penalties Federal Water Pollution Control Act Amendments of 1972 101 MARSH District Judge INTRODUCTION This action was filed by the Sierra Club pursuant to the citizen suit provision of the Federal Water Pollution Control Act Clean Water Act or Act 38 U.S.C. $ 1365 This section states that any citizen may commence a civil action on his XL'SHTINA XL'SHTINA XL'SHTINA * ->ONA8 NOYUE 70:11 06 22Z NAI SCHMOLL v ACands INC 878 Cite na 705 F.Supp 868 D.Or. 1988 rporations liability enter Ase'n v the ; see 38 496 80 Brandes t transfers of corpo to. escape liability Coop & cooperative exclusive marketing rporatesuccessor of a milk distributor ad dissolved and ndes Creamery Inc. ace The court held c liable for Brandes noting that randes Creamery Creamery Brandes rpose and that was to il liability of Brandes rom the contract in of the record equity he form at the sub- president assumed Oceanic Inc.'s president because the president the However rump abilitieady personally liable for Oceanic abilitieady personally personally liable for Oceanic Oceanic abilitieady OF 3 the overall transfer of interest in Sect of to strip Oceanic Inc. of a was land leaving Oceanic Inc. asset .aluable creditors of Oceanic Inc. with and the " 445 creditors at 25. Invoking its equitable the court held Oceanic power equitable Development the successor corporation li- Oceanic Inc.'s debts of the asset transfer in this The to that in Peterson Ray- Industriessimilar ase IndustriesIndustries had valuable assets RIPG Clutch & Brake It conveyed mark Wet to Raytech which was owned assets former sharehold these Raymark Industries by transaction left Raymark Indus Raymark with staggering asbestos liabilities operations unsecured notes unprofitable unprofitable blocks unprofitable stock which could not be sold in large without a deep discount Present and future asbestos tort claim- creditorsas Raymark Industries potential ants were likewise left with little in the transaction The money Raytech paid for Raymark Industries generating transfer of assets was designed to escape liability Raymark Industries has experi enced severe financial problems because of asbestos litigation By April 1 1988 nearly 34,000 asbestos related personal injury cases were pending against Raymark Industries These claims exceed 88 billion Trying cases to verdict has cost an average of 59,000 Raymark Industries has been assessed more than 75,000,000 in punitive damages from asbestos litigation Raymark Industries has already exhausted approximately 71 of its almost 400 million in insurance coverage In response to Raymark Corporation's financial difficulties Craig Smith * and oth er officers and directors with the advice of counsel developed the sophisticated corporate restructuring scheme The New York law firm of Debevoise & Plimpton advised Raytech's board of directors that It should be possible under existing case law for Raytech to acquire assets or businesses of Raymark without thereby subjecting Raytech or such acquired as- sets or businesses to liability for the asbestos claims against Raymark under the doctrines of successor liability sets will not adequately compensate piercing the corporate veil or fraudulent and future claimants If Raytech 2d at 841 present liability for Raymark Industries conveyance ark Industries asset etosrctaspesthese creditors will no longer have Raymark Corporation's 1985 annual re- i ecisely parallel the access to Raymark Industries valuable as port stated that the company's long term Dairy Coop How set or to the potential stream of profits strategy was ghlights two impor generated by these assets to protect and enhance shareholder in- | gon law that are di the context of the vestment to maximize the amounts avail- | st that case shows In the present case restructuring and the partici able for deserving asbestos claim- more concerned with | 1saction than its par corporate pants statements show that the elaborate anta and to limit exposure for asbestos Oregon law rejecta g carried out to es- ates those principles 1. A consolidated case against Raymark Indus- mies involving more than 2,200 plaintiffs is cur- rently Court pending in the for the Eastern United District States District of Texas The verdict in that case could far exceed Raymark trol Corporation currently holds 100 percent of the shares of Raymark Corporation Craig Smith owns 45 percent of the shares of LCC and his son Bradley Smith owns another 15 per- cent of the shares of LCC iffs loaned 100,000 oration whose princi le contract Oceanic est in the land sale t who immediately to Oceanic Develop corporation In re- k place in Oregon Industries insurance policy limits & From 1980 to 1985 Craig Smith was employed by Raymark Corporation as a division presi dent In 1985 Smith became the President and Chief Executive Officer of Raymark Corpora tion Presently Smith is the President and Chief Executive Officer of Raytech Smith established Litigation Control Corporadon on August 27 1987. Its purpose is to proride services to corporations which have high volumes of litigation particularly in the field of 9. Raymark Industries 1988 Settlement Guidelines provides a maximum payment of 452 In a recent case involving clear asbestos liability and death from mesothelioma Raymark Industries offered nothing The jury returned a verdict of 1.7 million in compensatory damages against Raymark Industries Sawyer v Ray- mark Industries Inc. No. 87-542 D.Haw Dec. 6 1988 liability and toxic tort Litigation Con- | | 874 703 FEDERAL SUPPLEMENT claims only to businesses currently - shell unable to satisfy its asbes threatened thus enabling our other busi related obligations a nesses and any new business opportunities to grow unshadowed by he cloud of sbestos liability Another Another purpose of the corporate restruc This ca presents serious equitable considerations At least 21 million American workers have been directly exposed to sig nificant amounts of asbestos at the work turing was to gain access to new sources of capital and borrowed funds which could be to finance the quisition and oper of new businesses in a corporate rea ture that should not subject Raytech . such acquired businesses to the asbe related liabilities of Raymark John Kutzler who held various high- level positions at both Raytech and Ray- mark Corporation stated that the inten- is to remove an asset through differ ent ownership ownership from the exposure of the asbestos litigation Craig Smith testified that * tructuring was designed to in- Raytech from Raymark's liabilities 2 I find that although the corporate restructuring meets the technical formali- Cee of corporate form it i des's with the improper purpose of excapi stos- related liabilities Park Park Corporation changed from the of Raymark In- dustries to the subsidiary of Raytech to the subsidiary of ALM Raytech purchased Raymark Corporation's two valuable assets and then sold the remainder to ALM for $ million It is inconceivable that in an arms- length corporate transaction a buyer would have purchased an entity so lacking in assets and laden with liabilities There is no just reason to respect the integrity of these transactions Raymark Industries made substantial profita from the production of containing prod ucts Raymark Industries should not be allowed to avoid liability by transferring its profitable assets leaving no more than a 10. In 1982 John Kutzler was a treasurer of Raybestos Manhattan In 1984 Kutzler became a Board member of Raymark Industries Inc. 11. Plaintiff notes that if he were attempting to set aside th transactions rather than hold Ray tech respole respole for Laymark Industries torts the court could hold as a matter of law that the transactions constituted fraudulent conveyances under the Uniform Fraudulent Transfer Act Or place since 1940 and millions more have been indirectly exposed R. Seltzer Puni tive Damages in Mass Tort Litigation Addresing Addresing the Problems of Fairness Ef Aciency and Control 52 Fordham Rev. 87 37 n 1 1988 Tens of thousands of people become ill or die from asbestos lati diseases every year Note Who Will Compensate the Victims of Asbestos lated Diseases Manville's Chapter 11 Fuels the Fire 14 Envtl.L 465 466-67 1984 Asbestos lawsuits are ed in corresponding numbers.18 It is ironic that while Raymark Indus- tries prides itself for not following JohnsManville Corporation's Manville lead by filing bankruptcy Raymark is in effect at tempting a bankruptcy reorganization without affording creditors the protections of formal bankruptcy In December 1986 the United States Bankruptcy Court for the Southern District of New New York confirmed * Plan of Reorganization of Manville The Plan created a personal injury trust of presenantd billion to cover all of Manville's future known and unknown asbestos inju- ry liabilities See In re Manville Corp. First Amended Disclosure State- ment Second Amended an Restated Plan of Reorganization and Related Documents 11660 Nos 82 B 11656 2 B 11657 82 B 82 B 11665-11678 82 B 11675 82 B 11676 Bankr.S.D.N.Y Aug. 22 1986 Com The success or failure of Raymark porat ' attempts to escape asbestos lisbility wi rovide direction to other compa 12. Thre April 1 1988 Raymark Industries has by volvin 1,209 mark sction19s d in 68,057 separate 88 Individual plaintiffs In RayFilngs _ve been filed per month Industries proji is additional FilingsFilings through 1997 of approximately 1,200 the involved Asbestos More than 165 companies are asbestos litigation across the nation Asbestos Litig.Rep 4667 70Feb. 26 1962 Rev.Stat Rev.Stat 95.200-310 nies seeking t the Upholding tions would un stance I find that liability to Ra mark Industri tribution of p Therefore Ra mark's strict 1 my findings of F.R.Civ.P. 52 SIERRA ': ECTRO 1 CI United United S sent judgmer Water Act ald that co nization nent of nization was and would n Ordered 1. Federal ( District citizen citizen actio limited to limitation o formingforming non civil penalti 587780 * -> ->8NaNOU 80 IT 06