James F. Beasley's Affidavit for Manville's Chapter 11 Petitions (1982)

A nine-page affidavit by James F. Beasley, an officer of Manville Corporation and Johns-Manville Corporation, sworn August 26, 1982 and filed with the Chapter 11 petitions of the twenty-one Manville companies in the U.S. Bankruptcy Court for the Southern District of New York (In re Johns-Manville Corporation et al.). It states that J-M was a defendant in about 11,000 asbestos health suits brought by about 15,550 plaintiffs, that it had disposed of about 3,470 claims at an average of $16,600, that current cost per case including defense had risen to about $40,000, and that the burden of the litigation "could range from anywhere between $2 billion to many times that amount over the next twenty years."

What it shows

This is the company's sworn reason for the Chapter 11 filing. Beyond the case counts it reports that J-M had been "for the first time in 1981, found liable by juries for punitive damages in five separate asbestos-related actions," and that the ten punitive awards of 1981 and the first half of 1982 averaged about $616,000. It states that "The majority of the foregoing claims" alleged that J-M and other defendants "failed in their duty to warn of the hazards of exposure to and inhalation of asbestos fiber and dust." The board and its special committee, it says, "have concluded that the potential future impact" of the cases "could and probably will exceed Manville's ability to pay and finance the continuing operation of Manville's businesses."

Without Chapter 11, the affidavit says, Manville would have to sell or "dismember its businesses" to keep paying, and "future successful plaintiffs would be unable to collect the amounts of their judgments or proposed settlements." Manville had therefore "reluctantly, but of necessity," deemed the filing "an economic imperative" so that all claims could be estimated and paid under a plan of reorganization. That plan eventually created the Manville Trust.