New Jersey’s Third Circuit has refused to rehear a case brought by the New York City’s Housing Authority (NYCHA) against bankrupt G-I Holdings Inc., a materials supplier.
The Housing Authority had been attempting to have G-I Holdings held responsible for asbestos cleanup in housing projects in which the company had provided materials.
Facing approximately 500,000 claims of asbestos related injury, G-I Holdings filed for Chapter 11 bankruptcy protection in 2001.
In 2009, the Bankruptcy Court approved a reorganization plan for G-I, disposed of claims against G-I and barred creditors from filing new claims against the reorganized company. The Housing Authority did not challenge the ruling of the Bankruptcy Court at that time.
In 2013, the Housing Authority filed paperwork arguing that its newer motion was being filed as a government agency with regulatory power in concern to environmental laws versus as creditor seeking monetary relief. The Third Circuit Court of Appeals received New York City Housing Authority v G-I Holdings Inc. on July 14, 2016.
The Court wrote that NYCHA is a “public corporation” created to provide lower-income housing and had not “been given authority to enforce New York’s environmental laws.” The Court’s opinion further stated that NYCHA “hoped to avoid the steep discounting, inherent in most bankruptcy proceedings” and found the NYCHA should not be allowed to “circumvent” federal bankruptcy law.