A panel of federal appeals judges have determined that certain lawsuits against Owens Corning Sales LLC could proceed despite the company undergoing bankruptcy reorganization.
According to a Reuters report, the 3rd Circuit Court of Appeals has backed away from previous rulings for companies going through bankruptcy in allowing two product liability lawsuits against the home building materials’ manufacturer to continue.
Patricia Wright and Kevin West realized in 2009 that their homes had been built using Owens Corning roofing shingles that had cracked. This was long after the 2000 date when Owens Corning began filing for bankruptcy. They filed lawsuits suing the company for fraud, negligence, strict liability and breach of warranty.
Shortly after that time, the company posted notices informing the public of a deadline to file product liability and other claims against the company as it looked to clear its debt accumulated from a string of asbestos lawsuits. The plan was approved by a bankruptcy judge in 2006, three years prior to these specific claims being filed. Wright and West each claim they were unaware of their lawsuits when Owens Corning Sales’ bankruptcy proceedings began.
Cracked roofing shingles can lead to myriad problems for a homeowner. If shingles are cracked, they allow water to penetrate the home, leaking into roofs and walls, causing water damage to a home’s frame and potentially allowing mold and mildew to accumulate where it can pose health hazards to people living in the home. In addition to the thousands of dollars for the cost of roofing shingles, cracked ones can cause tens of thousands of dollars in damage to a home over time.
Owens Corning entered bankruptcy after settling on lawsuits in the late-1990s claiming the company’s products caused numerous people asbestos exposure-related diseases. The total of the settlements topped the billion-dollar mark when the company began filing for bankruptcy protection.
In making its decision, Reuters reports, the 3rd Circuit Court of Appeals went back on a previous decision that would have tossed Wright and West’s claims against the company. In a previous ruling, the court determined that claims filed before a company went bankrupt could be dismissed but since these Plaintiffs were unaware they’d be filing lawsuits against the company when it was reorganizing under bankruptcy protection, it could proceed.
A spokesperson for Owens Corning told Reuters the company was weighing whether to allow the lawsuit to proceed or to file an appeal on the 3rd Circuit’s decision. The decision is being viewed as a victory for other claimants seeking action against a company that has filed for bankruptcy.
