Asbestos Corporation Limited (TSXV:AB.H), CCAA

Asbestos Corporation Limited (TSXV:AB.H) (“ACL”), a Québec-based asbestos mining company, obtained CCAA protection on May 6. Along with ACL, several insurers which historically provided coverage for asbestos-related claims against ACL — namely Certain Underwriters at Lloyd’s, London, Tenecom Limited, The Ocean Marine Insurance Company Limited, NRG Victory Reinsurance Limited and The Scottish Lion Insurance Company Limited (collectively, “CLMI”) — acted as co-applicants on the CCAA application.

ACL ceased asbestos mining operations in 1986, but has since faced thousands of asbestos-related claims. The crisis escalated in 2023 when a South Carolina Court found ACL in contempt for refusing to disclose documents (which ACL refused to do on the basis that Québec’s Business Concerns Records Act prevents a Québec corporation from transferring such documents outside of Québec). The South Carolina Court sanctioned ACL, struck its pleadings and entered a receivership order that putatively stripped ACL of its right to defend itself in the US. The South Carolina receiver subsequently brought claims against ACL’s insurers, contributing to a disjointed and escalating litigation environment for ACL across multiple US jurisdictions.

The purpose of the CCAA proceedings is to consolidate proceedings into a single forum where claims can be determined and a plan for addressing these claims can be presented to creditors. Recognition has been sought from the New York Court, which has already granted a temporary restraining order.

Raymond Chabot is the monitor / foreign representative.

Counsel is Stikeman Elliott / Simpson Thacher & Bartlett for CLMI, McCarthy Tétrault / Orrick, Herrington & Sutcliffe for the monitor, Fasken for ACL and Blakes for General Dynamics Corporation.