Discharge Applied to Bar Unknown Claims

The golden ring sought at the end every Chapter 11 is a discharge from all claims known or unknown that existed prior to plan confirmation. Discharge generally involves a two-step process; first a bar date must be established which requires claimants to timely file their claim with the bankruptcy court; and second, the plan must be confirmed. The process of identifying claims for purposes of providing notice of a bar date can run from the very simple to the extremely complex. Trade creditors holding claims against the debtor are relatively simple to identify since their name and address should exist in the debtor’s books and records. However, claims arising out of exposure to toxic chemicals sold or distributed by a debtor years or even decades prior present an entirely different challenge. Those challenges were recently addressed in the Chemtura bankruptcy proceeding pending in the Southern District of New York, In re Chemtura, Case No. 09-11233 (Bankr. S.D.N.Y Nov. 23, 2016).

On March 18, 2009, Chemtura Corp. and several of its affiliates commenced their voluntary Chapter 11 bankruptcy ­proceedings. Although Chemtura was a “specialty chemical company,” the case was not identified as a mass tort bankruptcy. Nevertheless, there were a significant number of personal injury claimants seeking damages related to the prior sale or ­distribution of asbestos, coal tar, vinyl chloride, diacetyl and benzene.