WILMINGTON, DE – A bankruptcy judge overseeing the Imerys Talc America bankruptcy case issued an opinion on Oct. 13, throwing out the ballots of more than 15,000 claimants that had voted in favor of Imerys’ reorganization plan, effectively suspending a planned confirmation hearing and forcing the debtor Imerys Talc America to revisit its bankruptcy strategy.
U.S. Bankruptcy Judge Laurie Silverstein of the District of Delaware excluded the majority of votes from the Bevan & Associates Law Firm, finding that not enough due diligence was done to ascertain if the claimants would want to vote in favor of the plan. Previously, and prior to the voting deadline, Bevan’s claimants had voted to reject the Imerys plan, later changing their vote affirmatively after discussions with counsel from the Torts Claimants Committee (TCC).
The judge found that Bevan had little or no communication with his clients regarding the plan, bringing into question whether the ballots should be counted. “In other words, Bevan & Associates simply printed out a list of its clients in Excel spreadsheet format and slapped it behind a Master Ballot,” the judge wrote in the opinion. Moreover, the judge found that the majority of the Bevan Law firm claimants’ alleged diseases that were not compensable by the plan, and should not be allowed to cast ballots.
Following Judge Silverstein’s ruling, Imerys filed a motion to suspend the confirmation hearing pending further review of the plan. It was anticipated that after the Bevan votes were withdrawn that Imerys’ plan no longer had enough affirmative votes by the TCC to be approved. Under Section 524(g) of the U.S. Bankruptcy Code, a debtor’s reorganization plan must have at least 75% of current claimants voting in favor of the plan.
The ruling by Judge Silverstein comes after Johnson & Johnson and several Imerys insurers objected to the inclusion of the Bevan votes on several grounds.
The case is In re: Imerys Talc America Inc., No. 19-10289, U.S. Bankruptcy Court, District of Delaware.