CHARLOTTE – St. Louis asbestos firm Maune Raichle plans to appeal a $402,817.70 contempt penalty that bankruptcy judge Laura Beyer imposed for challenging one of her orders in Illinois.
The firm filed separate appeal notices on Sept. 22 and 24, against her contempt order and her penalty order.
District Judge Robert Conrad will consider the appeal.
Beyer announced the amount at a hearing for Georgia Pacific entity Bestwall on Aug. 31, and issued an order about it on Sept. 23.
She wrote that it would cover fees and expenses that Bestwall incurred in Southern Illinois district court.
She wrote that it didn’t include all of Bestwall’s damages, and it could have been considerably greater.
Georgia Pacific created Bestwall in 2017, and assigned asbestos liabilities and insurance proceeds to it.
Bestwall petitioned for bankruptcy protection and asked Beyer for a hearing that would produce an estimate of its liabilities.
Asbestos firms claimed Bestwall could estimate future liabilities on the basis of past settlements.
Bestwall, however, responded that fraud inflated past settlements.
Bestwall claimed some plaintiffs alleged one set of exposures in court and another in proceedings with private bankruptcy trusts.
Bestwall crafted a questionnaire to detect double dippers, and Beyer ruled in March that firms had to fill it out for each client by July 26.
Days before deadline, Maune Raichle and other firms sued in the Southern District of Illinois for a finding that Bestwall should send individual subpoenas.
Beyer had rejected that idea, stating she didn’t believe the firms wanted clients filling it out.
She had also included in the questionnaire order a provision that anyone seeking relief from it must do so by motion in her court.
When the Southern District of Illinois action started, Beyer ordered Maune Raichle and the others to show cause why she shouldn’t impose sanctions.
Everyone backed off but Maune Raichle, which lost the case in Illinois when District Judge Staci Yandle found she lacked jurisdiction.
Beyer held Maune Raichle in contempt on Aug. 18, finding its response “rests on the idea that they are the proper expositors of the law.”
She found they concluded that they were entitled to disregard her order and challenge it in another jurisdiction.
“That is the very definition of contempt,” Beyer wrote.
In her penalty order she found the Jones Day firm was entitled to $128,957.95.
She found the Robinson Bradshaw firm was entitled to $126,657.
She found the King and Spalding firm was entitled to $145,735.
She found the Bates White firm was entitled to $1,467.75.
She found Maune Raichle’s forging ahead was egregious and Bestwall’s vigorous response was reasonable to defend her order.
Questionnaires in general hadn’t produced much information as of Sept. 8, according to an enforcement motion Bestwall filed.
Bestwall claimed that among about 800 law firms, four provided useful answers.
Bestwall claimed the rest didn’t return questionnaires, or raised objections that Beyer overruled, or skipped hard questions.
Beyer set a hearing Sept. 29.