Manville Press Release Announcing Its Chapter 11 Filing (1982)

A four-page press release headed "Manville Files for Reorganization," for release August 26, 1982, in a copy marked "Draft 2 of 8/25/82." It announced that Manville had filed under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York at the opening of business on Thursday, August 26, 1982, and that the filing "was forced by the continuing burden of litigation costs" while operations and cash flow remained strong. It said over 16,500 suits were pending, coming in at 500 a month, that the company was forecasting "at least 32,000 or more new asbestos lawsuits," and that disposition costs were averaging $40,000 per claim.

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The release blames the cost on "continued Government refusal to accept responsibility for persons injured in shipyards during World War II and later," on Congressional delay over occupational disease compensation and on "the failure of insurance companies to fulfill their obligations to Manville." It quotes John A. McKinney, the chief executive: "Nothing is wrong with our businesses. Filing under Chapter 11 does not mean that the Company is going out of business or that its assets will be liquidated. Lawsuits are the problem." It notes that the filing automatically stopped all pending and new suits, gives Manville's assets as about $2.2 billion against liabilities of about $1 billion excluding asbestos and other product claims, and lists the twenty North American affiliates that filed, headed by Johns-Manville Corporation. Trading in the stock was suspended by the New York Stock Exchange.

The "16,500 such suits" is close to the number of plaintiffs rather than of cases: the Legal Department's August 4 presentation counted 10,977 open cases for 15,542 plaintiffs as of June 30, and the affidavit filed with the petitions gives about 11,000 suits by about 15,550 plaintiffs. The company's account of the bankruptcy appears in its 1982 annual report.