Summertime Hope for Saint Gobain’s Asbestos Victims? 

by Laurie Kazan-Allen



On July 7, 2022 Judge Craig Whitley from the US Bankruptcy court in Charlotte, North Carolina, issued the latest ruling in the long running saga of the potentially “fraudulent” bankruptcy of the French-owned American company CertainTeed LLC.1 The fact that he found favor with allegations that the parent company Compagnie de Saint-Gobain SA (Saint Gobain) and its CertainTeed materials division had “hindered the rights of asbestos victims,” breathed new life into the fight to reinstate the rights of dying plaintiffs.

Following the same playbook as the American pharmaceutical giant Johnson and Johnson, on October 23, 2019 the French construction-products giant Saint Gobain used the Texas two-step2 to off-load billions of dollars of potential liabilities for asbestos-related claims from its subsidiary CertainTeed into a new company DBMP, which was put into Chapter 11 bankruptcy 3 months later.3 Under Chapter 11, all litigation against DBMP is now frozen. As one expert explained: “The upshot for the parent companies: all the benefits of bankruptcy protection with none of the usual financial and reputational wreckage.”

Whilst the use of the Texas two-step seems to have progressed other defendants’ agendas up till now, Saint Gobain’s plans have been impacted by the testimony of whistleblower Amiel Gross, a former Saint Gobain lawyer who helped plan the bankruptcy.4 Evidence presented by Gross in proceedings before Judge Whitley in August 2021 suggested that Saint Gobain had misrepresented its intent in creating DBMP and categorized testimony by its executives as “misleading” and “not truthful.” The Judge agreed, finding that the statements by the company’s executives were “contrary to the evidence” and strained “credibility.”5

Project Horizon, the name given to Saint Gobain’s project to off-load the claims against CertainTeed, was highly secretive and was, contrary to sworn testimony to the court, conducted with the knowledge of the French parent company’s lawyers and executives. Whilst head office was keen to avoid the stigma of a bankruptcy – which is much greater in France than in the US – the company was also keen to stem the financial hit it was taking: court records show that since 2002, “the firm has spent about $2 billion on legal fees, judgments and settlements in more than 300,000 cases…”

Like Johnson and Johnson, the most famous member of the Texas two-step club, Saint Gobain is an incredibly wealthy conglomerate with a market capitalization of $31.2 billion as of May 12, 2022,6 annual revenue of $52.2bn and 167,816 employees in 75 countries. According to Steven Kazan, a California lawyer who has represented asbestos victims since 1974 including many from CertainTeed’s California plant as well as workers exposed to CertainTeed’s asbestos-containing products at other workplaces:

“The Texas two-step mass tort bankruptcy strategy has as its prime objective the protection of corporate assets; it does this by creating a legal structure which heavily discounts corporate sins and deprives victims of the right to try their cases in local courts before juries composed of their neighbors. It is a morally as well as legally questionable tactic which adversely impacts on the rights of American citizens to hold defendant corporations to account for the damage they have done.

US Senator Sheldon Whitehouse stated earlier this year that this stratagem violates ‘the principles of bankruptcy, denies plaintiffs their day in court and uses a trick of corporate law to hide assets in plain view, with courts’ connivance.’ I couldn’t agree more. In this particular situation, there is widespread belief that the process which created DBMP was fraudulent in intention and design and was a premeditated attempt to gain leverage over the plaintiffs, many of whom are dying, by securing a stay on all pending and new cases for years to come. After the ruling last week, we have grounds for optimism the Judge will, after giving DBMP, new CertainTeed and Saint Gobain a full and fair trial, hold them to account for the harm they have done.”7

July 13, 2022


1 Scurria, A. Saint-Gobain Must Face Challenge to Asbestos Unit’s Bankruptcy Case. July 8, 2022.
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2 “The Texas two-step” is a legal defense advanced by defendant corporations to neutralize tort liability claims. In the first instance, the parent corporation creates a new entity which inherits financial liabilities such as claims from asbestos victims; in the second instance, it puts that company into bankruptcy thus freezing all claims against it. Meanwhile, the parent company is able to carry on business a usual.

3 From 1962, CertainTeed was the owner of four factories specializing in the manufacture of asbestos-cement piping and roofing products. In the early 2000s, the first asbestos cancer claims against CertainTeed were initiated; more were to follow.

4 Levine, D. Spector, M. How a bankruptcy ‘innovation’ halted thousands of lawsuits from sick plaintiffs. June 23, 2022.

5 Verdict by Judge J. Craig Whitely. Case No. 20-30080. August 10, 2021.

6 Forbes. Saint Gobain. July 12, 2022.

7 Email from Steven Kazan, July 12, 2022.



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