Free Appellee's Brief - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWAR

In re:
W. R. GRACE & CO., et aI.,
Debtors.

)
) )

)
) )

Civil Action No. 07-287 RLB Hon. Ronald L. Buckwalter United States District Judge (by special designation) Bankruptcy Case No. 01-01139 (JKF

On Appeal From The United States Bankruptcy Court For The District of Delaware (Fitzgerald, J.)

APPELLEES' BRIEF

David M. Bernick, P.C. Lisa G. Esayian Samuel L. Blatnick Michael T. Dierkes

Laura Davis Jones James E. O'Neil
PACHUSKI STANG ZIEHL YOUNG JONES

& WEINTRAUB, LLP

KIAND & ELLIS LLP 200 East Randolph Drive
Chicago, Ilinois 60601

(312) 861-2000

919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, Delaware 19899-8705 (302) 652-4100

August 20, 2007

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TABLE OF CONTENTS
INTR 0 D U CTI 0 N .......................................................................................................................... i

STATEMENT OF JURISD I CTI ON........................ ......................................... ...........................3

STATEMENT OF THE is S UES ..................................................................................................3
STAND ARD 0 F REVIEW ......................................................................................... ..................3

STATEMENT OF THE CASE AND THE FACTS .............................................................4
i. The Bar Date and Notice Program. ..........................................................................4
II. The Claims Piled By S&R. ......................................................................................6
III. The Debtors Worked To Determine Whether S&R Represented These

Claimants. ................................................................................................................ 7
iv. The Banptcy Court Found That S&R Was Not Authorized Before The

Bar Date To Represent These Claimants. ................................................................9

V. The Anderson Memorial South Carolina Litigation. ............................................10
ARGUMENT ........... ....................... .......................................... .................................................. ..11
I. The Banptcy Cour Correctly Determined That Unauthorized Claims

Could Not Be Ratified After The Bar Date. ..........................................................11
II. S&R's Role As Counsel To The Named PlaintiffIn An Uncertified South

Carolina Putative Class Action Did Not Afford S&R Authority To File These Claims. ... ..................... ............. ............................................. .......................16
III. Claimants' Knowledge Of

The Bar Date Is Irrelevant To This AppeaL. ...............20

A. S&R Had Two Years To Obtain Actual Authority, But Did Not. .............20 B. S&R, Not Grace, Failed To Notify Its Putative Claimants. .......................20
C. Publication Notice Was Proper for these Claimants, Who Were

"Unkown" Creditors. ............................................................................. ..22
CON CL U S i ON ................... ..................................................................................... ................... .24

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TABLE OF AUTHORITIES
Cases
Anderson Memorial Hospital v. W.R. Grace Co., et al., Civ. No. 92-CP-25-279 (S.C. Comm. Pleas 1992) ................................. 8, 9, 10, 11, 17, 18
Boyce v. Chemical Plastics,

175 F .2d 839 (8th Cir. 1949) ..................... .................................... .......................... ......... 15
Brunson v. American Koyo Bearings,

623 S.E.2d 870 (S.C. App. 2005) ..................................................................................... 19
Chemetron Corp. v. Jones, 72 F.3d 341 (3d Cir. 1995).......................................................................................... 23, 24
City of

Trenton v. Fowler-Thorne Co., 154 A.2d 369 (N.J. Super. 1959)... ................................................................................... 13

Cook v. Tulls, 85 U.S. 332 (1874)...... .......................................................................................... ....... ..... 12
Doe v. Howe,

607 S.E.2d 354 (S.C. App. 2004) ..................................................................................... 19
Farmer v. Monsanto Corp.,

579 S.E.2d 325 (S.C. 2003) ........................................................................................ 18, 19
Federal Election Com 'n v. NRA Political Victory Fund, 513 U. S. 88 (1994)..................................... ....................................................... 1, 12, 13, 15

In re Amdura Corp., 170 B.R. 445 (D. Colo. 1994) ........................................................................................... 17
In re American Reserve Corp., 840 F .2d 487 (7th Cir. 1988) ................................................................................ 17, 18, 19
In re Broadband Wireless Intern. Corp.,

295 B.R. 140 (lOth Cir. BAP 2003).................................................................................. II

In re Charter Co., 125 B.R. 650 (M.D. Fla. 1991) ......................................................................................... 24 In re Charter Co., 876 F.2d 866 (11th Cir. 1989) .......................................................................................... 19
In re Continental Airlines,

l77 B.R. 475 (D. DeL. 1993) ............................................................................................... 3

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In re Eastern Supply Co.,

267 F.2d 776 (3d Cir. 1959).............................................................................................. 15

In re Electronic Theatre Restaurants Corp., 57 B.R. 147 (Bank. N.D. Ohio 1986) ............................................................................. 17
In re FIRSTPLUS Financial Inc.,

248 B.R. 60 (Ban. N.D. Tex. 2000)......................................................................... 15, 16
In re Kolstad, 928 F.2d 17l (5th Cir. 1991) ............................................................................................ 14

In re Standard Metals, 817 F.2d 625 (10th Cir. 1987) .................................................................................... 17, 18
In re Udell,

454 F .3d 180 (3d Cir. 2006)...... ....... ......... .............. ............... ................. ............................ 3

Lebovitz v. Mudd,
347 S.E.2d 94 (S.C. 1986) ............... ....................... ....... ................................. .................. 19

Mellon Bank, NA. v. Metro Communications, Inc., 945 F .2d 635 (3d Cir. 1991 )............................ .............. ....................................................... 4

Mercado-Boneta v. Administracion del Fondo de Compensacion al Paciente, 125 F .3d 9 (1 st Cir. 1997)................. ................................................................................ 14
Murphy v. Owens-Corning Fiberglass Corp.,

550 S.E.2d 589 (S.C. App. 2001) .................................................................................... 19
New Hampshire v. Maine, 532 U. S. 742 (2001).................... ....... ............ ............ ........................... .......... .................. 21

Pacifcorp and VanCott Bagley Cornwall & McCarthy v. W. R. Grace, et. aI,
No. 05-764,2006 WL 2375371 (D. DeL. Aug. 16,2006)...............................................2,6
Reid v. White Motor Co.,

886 F.2d 1462 (6th Cir. 1989) ................................................................................... 18, 19
SEI Corp. v. Norton Co.,
631 F. Supp. 497 (RD. Pa. 1986) ..................................................................................... 16

Town of Nasewaupee v. City of Sturgeon Bay, 25l N. W.2d 845 (Wis. 1977) ............................................................................................ l3

Statutes
28 U.S. C. § 158( a) ........................................................... ............................................................... 3

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S.C. Code An. § 14-3-330(2) ....................................................................................................... 19

S.C. Code An. § 15-5-150............................................................................................................ 18

Other Authorities
Restatement (Second) of Agency § 90 (1958) .......................................................................... 1, 13

Rules
Federal Rule Banptcy Procedure 300 1 (b) ..................................................... .................... 11, 16

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INTRODUCTION
Appellants ask this Court to overtrn a Bankptcy Court order disallowing forty-fourl
Asbestos Property Damage Claims2 for which the law firm of Speights & Runyan ("S&R") did

not have authority from the actual claimants to file claims on their behalf at any time before the

Debtors' claims Bar Date. In so arguing, Appellants seek now -- more than four years after the

March 2003 Bar Date -- to undo several prior Bankrptcy Court rulings that were never
appealed.

Appellants argue that undated and post-Bar Date authorizations from the claimants

ratified S&R's authority to fie these claims. The Banptcy Court properly rejected this
arguent because it rus afoul ofthe well-established rule that an agent cannot ratify a
principal's unauthorized acts when an intervening deadline occurs between the time of

the

unauthorized act and the alleged ratification. Mem. Gp. at 5 (Dkt. 1); Federal Election Com'n v.
NRA Political Victory Fund, 513 U.S. 88 (1994); see also Restatement (Second) of Agency § 90

(1958) ("If an act to be effective in creating a right against another or to deprive him of a right
must be performed before a specific time, an affirmance is not effective against the other unless
made before such time.").

In an attempt to show that somehow it did have timely authority, S&R argues it was
authorized to file these claims because S&R was counsel to a putative class representative in an

uncertified South Carolina state court class action. Appellant Br. at 8-11 (Dkt. 7). However, this
1 The Bankptcy Court's April

17 , 2007 Order expunged seventy-one unauthorized claims. Between the original the April 17, 2007 Order, twenty-seven of the claims were either expunged by the Bankptcy Court on other grounds or withdrawn by S&R. Accordingly, fort-four claims remain at issue.
briefing on the authority issues for to these claims in December 2005 and Januar 2006 and entr of

2 The Banptcy Court set March 31, 2003 as the deadline for asserting all Asbestos Propert Damage Claims,
defined in the Bar Date Order as claims "relat(ing), for example, to the cost of removal, diminution of

value or economic loss caused by asbestos in products manufactured by the Debtors or from vermiculite mined, miled, or processed by the Debtors." (Bnk. Dkt. 2382).

propert

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argument is not properly par ofthis appeaL. In 2005, the Banptcy Court found that even if
S&R is putative counsel to some class, its status as class counsel did not give it authorization to

fie individual claims on behalf of putative class members. (Bnk. Dkt. 1 1080). Because S&R
did not appeal this ruling, it is law of the case. Therefore, in the opinion being appealed here, the

Banptcy Court did not address the already-resolved issue of S&R lacking authority to file
individual claims premised on its role as putative class counsel, and S&R's attempt to seek an

appeal on this issue is almost two years late. Moreover, even if this Court were to consider this
unappealed issue, S&R is not putative class counsel to these forty-four claimants because (i) they
are not South Carolina residents, (ii) the putative class included only South Carolina claimants,
and (iii) no class was certified as to Grace.

Appellants lastly argue that the Banptcy Cour should have performed a factual
inquiry to determine whether each claimant received actual notice of the Bar Date, presumably to

show that Appellants would have filed timely proofs of claim. But the time to appeal the

Debtors' publication notice program was in 2003. Ths Cour has already determined that the
notice program was sufficient and Grace did not have to provide actual notice to potential

creditors not known to Grace and not discoverable through the exercise of "reasonable
diligence." See Pacifcorp and VanCott Bagley Cornwall & McCarthy v. W. R. Grace, et. al.,
No. 05-764, 2006 WL2375371 (D. DeL. Aug. 16,2006).

The Banptcy Court also correctly found that allowing Appellants' late authorizations

would eviscerate the finality ofthe Bar Date and prejudice the Debtors and creditors who timely

fied claims. Mem. Op. at 6 (Dkt. 1). Moreover, prior to the April 2007 opinion at issue here,
the Bankptcy Court correctly determined that S&R is responsible if any potential claimants did
not receive notice of the Bar Date. Having successfully lobbied the Court to eliminate

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requirements from the Bar Date Order that would have ensured actual notice to Appellants, S&R
is estopped from arguing that Grace should have provided such notice.

For these reasons, the Bankptcy Court's order disallowing the forty-four unauthorized
claims was not clearly erroneous, and this Court should deny these appeals.

STATEMENT OF JURISDICTION
Grace does not contest S&R's statement of appellate jurisdiction.

STATEMENT OF THE ISSUES
1. Whether the Banptcy Court correctly disallowed forty-four asbestos property
damage

claims filed by a law firm, S&R, that filed the claims without authorization from the

claimants.
2.

Whether the Banptcy Court erred in not finding that S&R's role as counsel for

a putative named plaintiff in an uncertified South Carolina state court class action gave S&R authority to file proofs of claim in this Chapter 11 case on behalf of non-South Carolina
claimants.

3. Whether the Banptcy Court correctly decided that S&R was responsible if any
property damage claimants did not receive actual notice of the Bar Date and, therefore, there was
no need for factual inquiry concerning notice to Appellants.

STANDARD OF REVIEW
This Cour sits as an appellate court for the purpose of reviewing final orders in
banptcy cases, 28 D.S.C. § 158(a), and uses the same standards of

review as a court of

appeals would use. See In re Udell, 454 F.3d l80, 183 (3d Cir. 2006). The standard of review to
be applied turns on the nature of the issues presented on appeaL. See In re Continental Airlines,

177 RR. 475, 478 (D. DeL. 1993); see also Fed. R. Ban. P. 8013. The Bankptcy Court's
factual findings are accorded great deference and are not disturbed unless clearly erroneous. Id.
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Legal conclusions are reviewed de novo. Udell, 454 F.3d at 183. For mixed questions oflaw,

the Banptcy Court's finding of

"historical or narative facts" must not be disturbed unless
those

clearly erroneous, and its "choice and interpretation oflegal precepts and its application of

precepts to the historical facts" are reviewed de novo. Mellon Bank, NA. v. Metro
Communications, Inc., 945 F.2d 635, 642 (3d Cir. 1991).

STATEMENT OF THE CASE AND THE FACTS
The Appellees are debtors in possession in consolidated chapter 11 cases filed on April 2,
2001. The Banptcy Court's April

22, 2002 Bar Date Order required asbestos property

damage claims against the Debtors to be fied by March 31, 2003 (the "Bar Date"). (Bnk. Dkt.

1963). An April 17, 2007 Banptcy Cour order disallowed and expunged forty-four claims
signed and filed by S&R lawyers but not authorized by claimants before the Bar Date. This

Appeal challenges the April 2007 order and purports to challenge earlier, unappealed Banptcy
Cour rulings.
I. The Bar Date and Notice Program.

In order to assess its asbestos liabilties and work towards confirmation of a plan of
reorganization, in June of2001, Grace moved for a bar date for asbestos property damage claims.

(Bnk. Dkt. 586). Many parties strongly objected, and for the next year, the Debtors worked
with the Official Committee of Asbestos Property Damage Claimants (the "PD Committee"), the

Bankptcy Court, and other interested parties to resolve the PD Committee's opposition and to
craft the Bar Date Notice, the Notice Package and a comprehensive system of publication (the
"Bar Date Notice Program").

During this process, the Banptcy Cour considered the scope of the Bar Date Notice
Package and Program on several occasions and determined that the Debtors' program of actual
notice to more than 200,000

known asbestos claimants, coupled with an extensive print media
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notice program, was broad and more than adequate to reach all potential asbestos property
damage claimants. (See, e.g., Bnk. Dkt. 2057, 4/22/02 Tr. at 97). On April

22, 2002, after

nearly ten months of negotiations and multiple hearings, the Banptcy Court (i) entered the
Bar Date Order, which set March 31, 2003 as the bar date for filing Asbestos Property Damage
Claims; (ii) approved the Asbestos Property Damage Proof of Claim Form; and (iii) approved the

Notice Program. (Bnk. Dkt. 1963). The Bar Date Order specifically affirmed and approved the
notice program:
ORDERED that notice ofthe entr of this Order and of

the Bar Date to unown

claimants pursuant to the Debtors' Bar Date Notice Plan for Asbestos Property Damage Claims and Other Claims (the "Notice Plan"), as modified, and filed on April 12, 2002, shall be deemed good, adequate and suffcient notice of the Bar
Date. . . (Id. at 5).

To ensure notice to as many potential claimants as possible, the Bar Date Order originally required all counsel of record for Asbestos PD Claimants to either (i) certify that they had
contacted or attempted to contact their clients, provided them with the Bar Date Package and advised them regarding their rights to assert a claim against the Debtors before the Bar Date; or
(ii) provide Grace with the current names and addresses of their clients who may have claims

against Grace, so that Grace could send them the Bar Date Notice Package. (Id.).
On June 21,2002, the PD Committee -- of which Daniel Speights of

the S&R law firm

serves as co-chair -- fied a motion asking the Bankptcy Court to abate this requirement.
(Bnk. Dkt. 2274). When the Committee argued its motion, the Court recognized that the
property damage claimants' counsel, including S&R, were taking on the risk that their claimants
might not receive actual notice:

THE COURT: Well, look. They -- the attorneys are the ones at risk, not the Debtor, because if they blow a bar date and their clients don't file one, the
excusable neglect standard is undoubtedly not going to say, 'I didn't get the notice from my attorney,' and undoubtedly I'm going to say, 'too bad, your attorneys got

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the notice, go contact their malpractice carer.' I think it's for the attorneys'
safety. (Bnk. Dkt. 2502, 7/22/02 Tr. at 103-104).

The PD Committee responded: "The attorneys don't need the safety net. . . And so we would

ask that they be relieved ofthat obligation. (Id.). Accordingly, in September 2002, the

Banptcy Court abated this requirement from the Bar Date Order. (Bnk. Dkt. 2745 at 2). In
light ofthis record, the Banptcy Court recognized that Grace did all that it could to provide
actual notice to asbestos property damage claimants. (Bnk. Dkt. l1707, 1/26/06 Tr. at 76).
Neither S&R nor anyone else appealed the orders approving the Notice Program.3 The

orders became final and represent law of the case. And, this Court has already affirmed the
suffciency of

Grace's notice program. Pacifcorp, 2006 WL 2375371 at *15 ("(T)he Court finds
the bar date. (Grace) spent a

that the debtor in this case adequately published notice of

considerable amount of money publishing the notice in both national and local publications, and
Appellants have not challenged the sufficiency of

the publication notice.").

II. The Claims Filed By S&R.

In stark contrast to the seven asbestos property damage lawsuits that were pending
against Grace when it filed for bankptcy relief

in 2001, approximately 4,300 PD proofs of

claim were filed in response to the Bar Date. S&R, a law firm which had pursued putative class
actions against Grace and other manufacturers of asbestos containing materials for many years,

filed almost 3,000 individual claims as well as two putative class proofs of claim. Not a single
S&R-filed claim was personally signed by an actual claimant. Instead, attorney Dan Speights
signed almost 2,000 S&R claims, and another S&R attorney signed approximately 1,000 claims.
Not surprisingly, the "Verified Statement of

Multiple Representation" that S&R filed as required

3 In May 2002, the PD Committee sought leave to appeal an earlier version of the Bar Date Order, because that version established a Bar Date only for PD Claims, but not for asbestos personal injury or ZAI claims. However, the PD Committee's May 2002 Motion for Leave to Appeal did not challenge the Notice Program.

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by both the Federal Rules of

Banptcy Procedure and a specific Bankptcy Court order

demonstrated many problems with these 3,000 claims. (Bnk. Dkt. 7221). Among the principal
problems, hundreds of entries on S&R's Verified Rule 2019 Statement, including the forty-four
claims at issue in this Appeal, were filed on behalf of "buildings" or ''job sites" with no

indication that any real client existed or authorized the claim.

Further, in December 2004 when Debtors served counsel of record for PD claims with notices of intent to object to their claims, the Debtors received a letter from counsel for a labor

union that owned a building in Ohio. The union's counsel wrote that S&R-filed Claim No.
11591 "had beenfiled on behalf of

my client without authorization." (Bnk. Dkt. 9311, Ex. Q)

(italics added). The union's counsel complained that he had filed a proper PD claim, No. 2785,

on the union's behalf and that S&R's claim for the same building was unauthorized. The
Debtors received similar responses from other claimants.
III. The Debtors Worked To Determie Whether S&R Represented These Claimants.

After unsuccessful attempts at consensual resolution of the problems with the S&R claims, Debtors objected to S&R's claims and served discovery targeted to uncover whether

S&R actually represented the claimants whose buildings were at issue. The Debtors subpoenaed
several supposed S&R "clients" for depositions of persons knowledgeable as to whether the
claimant had (i) retained S&R to represent it in the Debtors' banptcy case and (ii) authorized

S&R to file a proof of claim on its behalf. (Bnk. Dkt. 8645). In response, many ofthese
"claimants" wrote to Grace that S&R did not have authority to represent them. See, e.g.,

American Medical Association affidavit (Bnk. Dkt. 93l1, Ex. A); Harvard Vanguard Medical

Associates letter and affidavit (Bnk. Dkt. 931l, Ex. C); Maryland Casualty Company letter

(Bnk. Dkt. 9311, Ex. E).

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While the Debtors filed objections and pursued discovery to determine whether S&R had

authority to file these thousands of claims, S&R began to "withdraw" hundreds of these claims.

Against this backdrop, on August 29,2005, the Banptcy Court directed S&R to
produce evidence that it had authority, as of the Bar Date, to file proofs of claim on behalf of

claimants for whom S&R previously failed to demonstrate authorization. (Bnk. Dkt. 9349,
8/29/05 Tr. at 73-78; Bnk. Dkt. 9501). On September 1,2005, Debtors filed their

Thirteenth

Omnibus Objection to almost 3,000 claims for which S&R lacked authority to represent the

claimants, including the forty-four claims at issue here. (Bnk. Dkt. 9311). On September 23,
2005, the Banptcy Court ordered S&R to provide the Debtors with evidence pertaining to the

status of S&R's claims, including "a list of all pending claims filed by Speights & Runyan for
which the claimant has provided express written authorization to file the claim and a copy of the
document or, if redacted, the portion of the document that contains such proof of express written
authority." (Bnk. Dkt. 9501).

For the forty-four claims at issue in this appeal, even after months of discovery,
objections, and the September 23,2005 Banptcy Court order, S&R was unable to produce

any evidence of pre-Bar Date claimant authority. Instead, S&R relied on (i) supposed authority
as counsel to the named plaintiff in a putative state court class action and (ii) claimant
authorization forms that were either undated or dated after the Bar Date.

During an October 31, 2005 hearing, the Bankptcy Court dealt with the first of these
arguments and determined that S&R's role as counsel to a putative named plaintiff

in a South

Carolina suit titled Anderson Memorial Hospital v. W R. Grace & Co., et aI., did not give S&R
authority to file individual claims on behalf of claimants in Grace's bankptcy proceeding. The

Court ordered S&R to withdraw 552 non-South Carolina claims and 52 South Carolina claims

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filed by S&R with no basis for its purported authority except its role as putative "Anderson

Memorial" class counseL. (Bnk. Dkt. 11025, 10/31/05 Tr. at 90). In November 2005, the Court
expunged these claims. (Bnk. Dkt. 11080). S&R did not appeaL. The Anderson Memorial

matter is discussed further in Section V below.

The Bankptcy Court heard oral arguments about S&R's lack of authorization to file the
forty-four claims at issue during hearngs in Januar 2006. After a multi-month stay ofthe

Grace banptcy proceeding, during the August 21, 2006 hearing, the Bankptcy Court

determined that, to the extent that S&R purports to represent Appellants, S&R had a duty to
notify Appellants of the Bar Date:

THE COURT: There shouldn't be a potential problem. If you have an obligation on behalf of the Anderson putative class to file proofs of claim of their behalf because of this ethics opinion, why don't you at least have the same obligation to notify them of the fact that there's a bar date and to make sure that they get the
information concernng the bar date and actual notice. I mean, the contradiction, I

think, is you can't on the one hand tell me you have a fiduciar duty to go par way but not the whole way with respect to the notice issue. (Bnk. Dkt. 13077,
8/21/06 Tr. at 255).
* * *

THE COURT: The bigger problem, Mr. Speights, I don't know how on the one hand you tell me you've got an ethical obligation to file a proof of claim on behalf of somebody and at the same time, don't have an ethical obligation to notify them

that there's a bar date that means that they have to file a proof of claim. (Id. at
259).

Durig the same hearng, the Bankptcy Court considered and took under advisement the issue
of

whether the claims filed by S&R without pre-Bar Date authority were properly filed. (Bnk.

Dkt. 13077,8/21/06 Tr. at 246).
iv. The Bankruptcy Court Found That S&R Was Not Authorized Before The Bar Date
To Represent These Claimants.

On April 17, 2007, the Bankptcy Court issued its Order and Memorandum Opinion
finding that S&R's undated and post-Bar Date authorizations did not establish that the claims
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were properly filed on the Bar Date. Accordingly, the Banptcy Court disallowed the fortyfour claims at issue in this AppeaL. In doing so, the Banptcy Court determined that, "as a

general matter, unauthorized acts (by a principal) can be ratified or affrmed. However,

ratification is not effective when it takes place after a deadline." Mem. Gp. at 5 (Dkt. 1). The

Banptcy Court further determined that allowing unauthorized claims would subvert the Bar
Date's puroses:

Additionally, allowing claimants to use late ratifications to extend the deadline established by the bar date compromises the underlying purposes of a proof of
claim bar date. The practical, commercial rationale underlying the need for a bar

date are (sic) manifest. The creditors and banptcy court must be able to rely on a fixed financial position of the debtor in order to evaluate intellgently the proposed plan of reorganization for plan approval or amendment purpose (sic).
After initiating a carefully orchestrated plan of reorganization, the untimely

interjection of an unanticipated claim, paricularly a relatively large one, can
destroy the fragile balance struck by all the interested paries in the plan. (Id. at 7) (internal citations and quotations omitted).
v. The Anderson Memorial South Carolia Litigation.

S&R's appeal in par is based on its supposed authority as counsel for a putative class of

asbestos property damage claimants. In 1992, S&R, a South Carolina law firm, fied Anderson
Memorial Hospital v. WR. Grace et al., in the South Carolina Court of Common Pleas, seeking

certification of a nationwide class of private building owners. (Bnk. Dkt. 9546 at Ex. 6). After
the state court struck non-residents' class claims under the state's "door-closing" statute (Id. at
Ex. 7), in 1996, S&R filed a second amended complaint limited to buildings in South Carolina
(Id. at Ex. 9), which remains operative.

On February 9,2001, in response to an ex parte "Emergency Petition ForA Rule To
Show Cause Why A Conditional Class Should Not Be Certified Against W.R. Grace" filed by

S&R, the South Carolina court conditionally certified the South Carolina class. (Id. at Ex. 11).
This conditional order was then superceded by the state court's final order certifying a class of

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South Carolina building owners in July 2001, after Grace's chapter 11 filing. (Id. at Ex. 13).
The South Carolina judge directed Dan Speights that "The Order should specifically state that

the Order affects only the three remaining Defendants, due to the stay as to W.R. Grace." (Id. at
Ex. 18). The text of

the final Order shows, the Bankptcy Court has recognized, and S&R has

admitted, that this final order did not apply to Grace.4 (Bnk. Dkt. 13894, 11/20/06 Tr. at 80).
Thus, no Anderson Memorial class of any kind was certified as to Grace, and the operative Anderson Memorial state court complaint does not encompass Appellants' claims for
buildings not located in South Carolina.

ARGUMENT
I. The Bankruptcy Court Correctly Determied That Unauthorized Claims Could Not
Be Ratifed After The Bar Date.

Fed. R. Bank. P. 3001(b) provides that "A proof of claim shall be executed by the

creditor or the creditor's authorized agent." As the Bankptcy Court recognzed, because Grace
objected to a large number of S&R claims as lacking such authority, and it was necessar for the

Bankptcy Court to order S&R in September 2005 to provide to Grace "a list of all pending
claims filed by Speights & Runyan for which the claimant has provided express written
authorization to file the claim and a copy of the document or, if redacted, the portion of the

document that contains such proof of express written authority." Mem. Gp. at 2 n. 4 (Dkt. 1).
S&R then had the burden of establishing pre-Bar Date authorization for these claims. See, e.g.,
In re Broadband Wireless Intern. Corp., 295 B.R. 140, 145 (10th Cir. BAP 2003) (After a party

has objected to a claim, "the creditor (claimant) has the ultimate burden of persuasion as to the
4 "On March 30,2001, Grace filed for bankptcy which automatically stayed all fuer proceedings in this case
against Grace." (Bnk. DIet. 9546, Ex. 13 at 5).

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validity

and amount of

the claim.") (citations omitted). For the forty-four claims at issue, S&R

did not have pre-Bar Date authority.

Although unauthorized acts generally can be later ratified or affirmed, the Banptcy
Cour correctly determined that such ratifications are not effective if they occur after a deadline.

Mem. Gp. at 5 (Dkt. 1). The March 2003 Bar Date was, as the Banptcy Court found,
precisel y this type of intervening deadline. (¡d. at 5-7). As the Banptcy Court stated, the
Supreme Court specifically recognized this principle of agency law in Federal Election Com 'n,

513 U.S. at 98, where the Cour considered whether the Solicitor General's post-deadline authorization of a certiorar petition filed by the Federal Election Commission (which could not
request certiorari without the Solicitor General's authorization) could relate back to the filing
date. The Cour expressly concluded that a principal's post-deadline authorization does not
relate back to the date of

the unauthorized filing so as to make it timely. !d. at 99. Thus, the
the Commission's unauthorized petition was

Solicitor General's post-deadline ratification of

ineffective. ¡d. Critically, Federal Election also involved an attorney-client relationship.
As the Supreme Court recognzed, retroactive ratification would grant the solicitor

general "unlateral power" to extend the filing deadline for certiorar petitions. !d. Similarly, if
the Bankptcy Court recognzed post-Bar Date authorizations, claimants would have unilateral
authority to extend the Bar Date, to the detriment of the Bankptcy Court, the Debtors and

timely claimants. Such a result would conflict with the finality of a Bar Date and well-

established principles of agency law, because the "intervening rights of third persons canot be
defeated by the (post-deadline) ratification." !d. at 98, quoting Cook v. Tulls, 85 U.S. 332, 338
(1874).

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Federal Election is consistent with other cases regarding late-authorized court filings
discussed by Appellants. See, e.g., City of

Trenton v. Fowler-Thorne Co., 154 A.2d 369 (N.J.

Super. 1959); Town ofNasewaupee v. City of

Sturgeon Bay, 251 N.W.2d 845,848 (Wis. 1977);
Trenton, the court allowed the city to ratify an

see Appellants Br. at 16-17 (Dkt. 7). In City of

unauthorized lawsuit filed by a city commissioner after the statute oflimitations had lapsed. The
court explicitly noted, however, that this result would have been different if third paries had

intervening rights: "a principal's ratification of an agent's unauthorized act wil validate the act
from its inception unless such validation wil impair 'intervening rights' of

third persons. . ."

154 A.2d at 373 (emphasis added; internal citation omitted). Similarly, the Nasewaupee court
refused to recognize ratification of an attorney's unauthorized commencement of a lawsuit,
where ratification came after expiration of

the statute oflimitations and expressly rejected S&R's

argument:

Ordinarly, a subsequent ratification relates back to the time of the original
transaction. However, that rule is not applicable when the rights of others have intervened by the passage of time. The rule presupposes that the principal who could have acted initially retains that power at the time ofthe ratification. Such is
not the case here.

251 N.W.2d at 848 (emphasis added; internal citation omitted).

This result is consistent with the Restatement (Second) of Agency § 90, which provides

"If an act to be effective in creating a right against another or to deprive him of a right must be

pedormed before a specific time, an affrmance is not effective against the other unless made before such time." As the comments to Section 90 make clear, "(t)he bringing of an action, or of
an appeal, by a purported agent can not be ratified after the cause of action or right to appeal has
been terminated by lapse of

time." !d. at Comment (a).

The Bar Date did exactly this. It terminated the right to bring a claim. The very purpose
of a bar date is to "enable a debtor and his creditors to know, reasonably promptly, what parties
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are makng claims against the estate and in what general amounts," In re Kolstad, 928 F.2d 171,
173 (5th Cir. 1991), and to assure "finality" regarding the universe of claims. See MercadoBoneta v. Admin. del Fondo de Compensacion al Paciente, 125 F.3d 9, 17 (lst Cir. 1997).

Given the finality that a Bar Date is intended to assure, as the Banptcy Court found,
there are ample reasons why "allowing claimants to use late ratification to extend the deadline
established by the bar date compromises the underlying purposes of a proof of claim bar date."

Mem. Op. at 7 (Dkt. 1). Rather than claimants deciding whether to assert claims, attorneys
would instead be allowed to file unauthorized "placeholder claims" on behalf of anyone, and

then obtain "authorization" any time after the bar date had lapsed. Thus, rather than knowing the
universe of claimants on the bar date -- the purpose of a claims bar date -- the debtors and
banptcy court would instead face a mixed bag of actual claims and "placeholders" filed on
behalf of

paries that might (or might not) subsequently ratify the unauthorized filings.

Complicating matters further, debtors would not know which "claims" were authorized

and which were not yet (and might never be) authorized by the claimants. Proofs of claim are allowed unless they are objected to by the debtor or another interested party. Therefore, under
Appellants' proposed rule, proofs of claim could be allowed and considered in the feasibility of a
plan of reorganization, even though the claimants have no knowledge of their participation in the

chapter 11 and never authorized the claims. And, under Appellants' rule, as happened here, a
claimant or authorized agent may file a proof of claim while an unauthorized attorney files a

duplicative placeholder claim. And, claimants could submit late claims simply by grasping on to
an attorney's improper filings. All of this would undercut the equitable goals of

bankptcy

cours, prejudice claimants who complied with the Bar Date, and cause the debtor to waste
resources in dealing with claims that should never have been filed.

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Nothing in Appellants' brief changes the rule that a claim canot be authorized after a
Bar Date. Appellants rely heavily on cases standing for the general principal that an agent may
ratify the unauthorized acts of its principaL. See Appellants Br. at 11-13 (Dkt. 7), citing to, e.g.,
In re Eastern Supply Co., 267 F.2d 776 (3d Cir. 1959); and Boyce v. Chemical Plastics, l75 F.2d

839 (8th Cir. 1949). That is not the issue in this appeaL. In fact, the Banptcy Court explicitly
stated that, "as a general matter, unauthorized acts (by a principal) can be ratified or affrmed."
Mem. Gp. at 5 (Dkt. 1). The issue here is whether such ratification may occur after an

intervening deadline, where the rights of third paries would be adversely affected. S&R cites no
case allowing this.

S&R's attempts to distinguish the cases properly relied on by the Bankptcy Court are
similarly unavailing. S&R argues that the "filing of a Proof of Claim pursuant to a bar order is
subject to much greater flexibility and equity" than the certiorari filing requirement in Federal
Election. Appellants' Br. at 14 (Dkt. 7). The record in the Debtors' banptcy case proves

otherwise. Unlike the filing deadline in Federal Election, which was a standard deadline not
developed for the specific facts and parties in that case, Grace's Bar Date was the product of
months of deliberate negotiations and discussions among many parties (including Daniel
Speights) and the Bankptcy Court. The entire Bar Date program was meticulously tailored to

meet the specific needs of the paries in this case and memorialized by the Banptcy Court in a
binding order unchallenged by S&R or Appellants.

Likewise, S&R's description of, and reliance on, In re FIRSTPLUS Financial Inc., 248

B.R. 60 (Bank. N.D. Tex. 2000), is both misplaced and misleading. See Appellants' Br. at 1415 (Dkt. 7). FIRSTPLUS dealt with whether the filing of a class proof of claim by class counsel

would be deemed authorized if the court later certified the class. The court found that the

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putative representative of the proposed class was not an "authorized agent" with authority to file

a class proof of claim, and, accordingly, the court disallowed the class proof of claim. 248 B.R.
at 68. In reaching this conclusion, the court expressly rejected the position advocated by S&R in

this appeaL. The court stated "Rule 3001 (b) allows a creditor to decide to file a proof of claim

and to instruct an agent to do so; it does now allow an 'agent' to decide to file a proof of claim

and then inform a creditor after the fact." Id. Thus, FIRSTPLUS does not in any way support

S&R's position, and the Bankptcy Court properly relied on it.
Appellants also rely on SEI Corp. v. Norton Co., to support the proposition that a pary

who delays in objecting to unauthorized actions by counsel purportedly representing them may

be bound by the attorney's unauthorized acts. 631 F. Supp. 497, 502-03 (RD. Pa. 1986). But
here, the Banptcy Court properly determined that late ratification causes har to third parties

(i.e. the Court, the Debtors and other creditors).
Thus, S&R has failed to provide any reason why the Banptcy Court's refusal to allow

post-Bar Date ratification of claims should be overtrned.
II. S&R's Role As Counsel To The Named Plaintiff

In An Uncertifed South Carolia Putative Class Action Did Not Afford S&R Authority To File These Claims.
S&R also argues that as "putative class counsel," it was authorized to file these proofs of

claim. Appellants' Br. at 8-11 (Dkt. 7). The Bankptcy Court rejected this argument in October
2005, and S&R did not appeaL. Therefore, in its April

17, 2007 opinion, the Bankruptcy Court

did not discuss the possibility of S&R being authorized to file individual claims as counsel to a

putative class, and, S&R canot be permitted to raise this issue in this appeaL. But, even if
examined on the merits, this argument fails. A putative class counsel is not the authorized agent
of each creditor in the putative class, and, in any event, S&R was not putative class counsel on
behalf of

these forty-four non-South Carolina claimants.
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In its October 2005 ruling, the Banptcy Cour correctly determined that at the time of
the Bar Date, S&R lacked authority to file individual claims on behalf of purported Anderson

Memorial class claimants. Accordingly, the Cour ordered S&R to withdraw 552 out-of-state
claims and 52 in-state, so-called Anderson Memorial claims. (Bnk. Dkt. 11025, 10/31/05 Tr. at

90). In November 2005, the Court expunged these claims. (Bnk. Dkt. 11080). S&R did not

appeaL. Having already determined this issue, the Banptcy Court was correct not to reexamine it or allow S&R to use it as a basis for authority.

Despite this law-of-the case, S&R tres to resuscitate the notion that its role as putative
class counsel somehow authorized it to file individual claims on behalf of claimants who did not

authorize those claims. This argument fails for two reasons.
First, "a class representative canot be considered the authorized agent of all of the
creditors of the

putative class." In re Standard Metals, 817 F.2d 625,631 (10th Cir. 1987),

modifed on other grounds, 839 F.2d 1383 (1988).5 This is because "(a)n agent may file a proof
of claim only for those individuals who have expressly authorized the agent to do so. Attempts
to file proofs of claim on behalf of individual class members have been rejected where there was

no showing that each member of the class had authorized the "agent" to file on his or her

behalf." Id., citing In re Electronic Theatre Restaurants Corp., 57 B.R. 147, l48-49 (Bank.
N.D. Ohio 1986). S&R seeks to circumvent this principle by relying on In re American Reserve Corp., 840

F.2d 487 (7th Cir. 1988). The Seventh Circuit held that a bankptcy court may allow class
proofs of claim (a holding never adopted by the Third Circuit), but did not go further and
5 After the 1988 Standard Metals opinon, the 10th Circuit issued an unpublished order "stating its opinion in

Standard Metals was vacated only insofar as it addressed the notice issue." In re Amdura Corp., 170 B.R. 445, 448 (D. Colo. 1994). Thus, the 10th Circuit's 1988 opinon did not affect the statement in its 1987 opinion that "a class representative cannot be considered the authonzed agent of all of the creditors of the putative class."

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eviscerate Fed. R. Ban. P. 3001's requirement that a proof of claim be "executed by the

creditor or the creditors' authorized agent." Thus, American Reserve and its progeny have no
effect on Rule 3001's requirement. See also Reid v. White Motor Co., 886 F.2d 1462, 1471-72

(6th Cir. 1989) (affirming banptcy court's denial of class treatment; "(i)t is well-settled that
consent to being a member or the representative of a class 'in one piece oflitigation is not
tantamount to a blanet consent to any litigation the class counsel may wish to pursue,'" quoting
Standard Metals, 817 F .2d 625 at 631).

Second, no Anderson Memorial class has ever been certified as to Grace, and thus S&R is

not putative class counseL. In 1994, the Anderson Memorial court held, pursuant to the "clear
mandate" of

South Carolina's door closing statute, S.C. Code An. §15-5-150, that it had no

subject matter jurisdiction over the claims of non-resident putative class members whose

buildings were not located in South Carolina. (Bnk. Dkt. 9546 at Ex. 7, p. 3). The state court
denied S&R's motion for reconsideration (Id. at Ex. 8), S&R did not appeal, and in 1996,
Anderson Memorial Hospital filed its Second Amended Class Action Complaint, which sought
certification of a class only of South Carolina claimants. (Id. at Ex. 9). Nine years later, in

another S&R case, the South Carolina Supreme Court confirmed that the state's door-closing

statute prohibits nonresidents from paricipating in a class action against a foreign corporation.

Farmer v. Monsanto Corp., 579 S.E.2d 325, 328 (S.C. 2003). Thus, the pending Anderson
Memorial putative class complaint is limited to South Carolina claimants, and the forty-four
claims at issue, relating to buildings in other states, are not part of the putative class.

S&R tries to suggest that the state court's "door closing" ruling was not immediately
appealable, and, therefore, S&R had a "fiduciary duty to all absent class members to take steps to

preserve known claims held by out-of-state class members. . ." Appellants' Br. at 1-2 (Dkt. 7).

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This is incorrect. Under South Carolina law, certain interlocutory orders are "immediately
appealable." Doe v. Howe, 607 S.E.2d 354, 356 (S.C. App. 2004); see also Brunson v. American

Koyo Bearings, 623 S.E.2d 870,872 (S.C. App. 2005). S.C. Code An. §14-3-330(2), in
paricular, permits immediate appeal of an order "affecting a substantial right when such order
(a) in effect determines the action and prevents a

judgment from which an appeal might be taken

or discontinues the action, (b) grants or refuses a new tral or (c) strikes out an answer or any part

thereof or any pleading in any action." Thus, Anderson Memorial could have immediately
appealed the "door closing" order, but elected not to. See Murphy v. Owens-Corning Fiberglass
Corp., 550 S.E.2d 589,593 (S.C. App. 2001) (order dismissing claims against pursuant to the
door closing statute is "directly appealable under Section 14-3-330(2) because it affects a

substantial right and strikes out par of a pleading"), overruled on other grounds in Farmer, 579
S.E.2d 325; see also Lebovitz v. Mudd, 347 S.E.2d 94, 96 (S.C. 1986) ("An order granting a Rule
12(b) motion as to one of

multiple claims is directly appealable under 14-3-330(2) because it

affects a substantial right and strikes out par of a pleading.").
Appellants' cases do not support the conclusion that putative class counsel has authority

to file individual claims. Appellants again misapply cases dealing with class proofs of claim,

where cours found that counsel to a putative class in a case pending at the time of bankptcy
\

may file a class proof of claim in a debtor's banptcy. See Appellants' Br. at 8-10 (Dkt 7),

discussing American Reserve, 840 F.2d at 493 ("Although we conclude that a representative may

file a proof of claim on behalf of a class of similarly-situated persons, this does not necessarily
mean that the Huddlestons may represent a class of

policyholders. . .); In re Charter Co., 876

F.2d 866, 876 (11 th Cir. 1989) ("We hold that a proof of claim filed on behalf of a class of

claimants is valid. . ."); Reid, 886 F.2d at 1470 (same). The issue in this appeal is not when or

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whether a banptcy court may recognize a class proof of claim,6 but rather whether counsel to

a pre-Chapter 11 putative class action may unilaterally file individual proofs of claim on behalf

of paries that were not and could not have been in the putative class.
Having properly found two years ago that S&R's role as putative class counsel did not

authorize it to file individual claims, the Banptcy Court did not abuse its discretion in refusing
to allow S&R to base its authority on its role as counsel to Anderson MemoriaL.
III. Claimants' Knowledge Of

The Bar Date Is Irrelevant To This AppeaL.

Appellants argue that the Banptcy Court erred by not requiring a factual inquiry
regarding whether each Appellant actually received notice of

the Bar Date. Appellants' Br. at

17-22 (Dkt. 7). The Banptcy Court was well within its discretíon, for three reasons.

A. S&R Had Two Years To Obtain Actual Authority, But Did Not.
First, as the Bankptcy Cour found, the "Debtors filed their motion for a bar date on
June 27, 2001, and the court entered the Bar Date Order on April

22, 2002, establishing March

31,2003, asthe claims bar date. Therefore, Speights had nearly two years between the Bar Date

motion and the expiration of the bar date, and eleven months between entry of the Bar Date
Order and the expiration of the bar date, during which he could have obtained authority to file

the claims." Mem. Op. at 2 n. 5 (Dkt. 1). Thus, Speights had plenty oftime to obtain actual
authority from his purported claimants, but did not. In such a situation, there was no reason to
examine whether the Debtors notified these claimants.

B. S&R, Not Grace, Failed To Notify Its Putative Claimants.

6 S&R filed two Anderson Memorial class proofs of claim in ths Chapter i I, one on behalf of a putative class of South Carolina building owners and one on behalf of putative class of "worldwide" building owners.

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Second, the Banptcy Court determined on multiple occasions that if potential PD

claimants received constructive but not actual notice, that is the fault of the PD Committee -- of
which Dan Speights is a member and co-chairman -- not of Grace, for two reasons.

The first reason is that the Bar Date Order originally required all counsel of record for

Asbestos PD Claimants either to (i) certify that they had contacted or attempted to contact all of
their clients, to provide them with the Bar Date Package and advise them of their rights to assert a claim against the Debtors by the Bar Date; or (ii) provide Grace with the clients' names and

addresses of clients, so that Grace could mail them the Bar Date Notice Package. (Bnk. Dkt.

1963). At the request ofthe PD Committee, including Dan Speights, the Banptcy Cour

abated this requirement. (Bnk. Dkt. 2274; Bnk. Dkt. 2745 at 2). In doing so, the Banptcy
Court made it clear that claimants' attorneys were at risk, and, the PD claimants' attorneys

accepted that risk. (Bnk. Dkt. 2502, 7/22/02 Tr. at 103-104).

Because S&R, through the PD Committee, successfully moved the Banptcy Cour to
strke provisions :fom the Bar Date Order that would have ensured that all ofS&R's purported

clients received actual notice, the Bankptcy Court correctly determined that any lapse in notice

is attributable to S&R, not Debtors. (Bnk. Dkt. 11707, 1/26/06 Tr. at 76; Bnk. Dkt. 13077,
8/21/06 Tr. at 255-257). Neither S&R nor anyone else appealed the orders approving the Notice

Program. The orders became final and represent law of the case. Thus, discovery of the Debtors
on this issue would have made no sense.

In addition, having successfully persuaded the Bankptcy Court to eliminate the
requirement that counsel certify they had contacted their clients before the Bar Date, S&R was
estopped :fom pursuing discovery designed to determine whether Appellants were entitled to
more notice. See New Hampshire v. Maine, 532 U.S. 742, 743, 749 (2001) ("(W)here a party

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assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he
may not thereafter, simply because his interests have changed, assume a contrary position,
especially ifit be to the prejudice of

the pary who has acquiesced in the position formerly taken

by him. . . Ths rule, known as judicial estoppel, generally prevents a pary from prevailing in
one phase of a case on an argument and then relying on a contradictory arguent to prevail in

another phase.") (internal quotations omitted).

The second reason is that the Banptcy Cour correctly determined that, to the extent
S&R purports to be putative class counsel for Appellants and therefore to have authority to file

individual claims on their behalf, S&R had a duty to notify Appellants of the Bar Date: "If you

have an obligation on behalf of the Anderson putative class to file proofs of claim on their behalf
. . . , why don't you at least have the same obligation to notify them of

the fact that there's a bar

date and to make sure that they get the information concerning the bar date and actual notice. I

mean, the contradiction, I think, is you can't on the one hand tell me you have a fiduciar duty to

go part way but not the whole way with respect to the notice issue." (Bnk. Dkt. 13077, 8/21/06
Tr. at 255). Thus, the Bankptcy Court determined S&R is estopped from both relying on its

role as putative class counsel and arguing that Grace, not S&R, should have notified these
claimants of the Bar Date.
C. Publication Notice Was Proper for these Claimants, Who Were "Unknown"

Creditors.
Third, the forty-four claimants were "unkown" creditors and, as such, were properly

served through the Debtors' Banptcy Court-approved publication notice program. See
Pacifcorp, 2006 WL 2375371 at *10. The claims are for buildings where Grace asbestos-

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containing materials allegedly were installed over thrty years ago'? In Pacifcorp, in these Grace

banptcy proceedings, this Court addressed issues concerning Grace's notice to current and
former owners of properties to which Grace shipped vermiculite for processing decades ago.

The owners alleged they had not received timely notice of Grace's Bar Date and sought to file

late proofs of claim. In affirming the Bankptcy Court's denial oftheir motion to file a late
claim, this Court specifically found Grace had no direct relationship with these claimants and

"did not know the identities of those current and prior owners." ld. at * 1 0 and n. 19. Because
the link between Debtors and the potential claimants was so "highly attenuated," the putative

claimants were unkown claimants, and Grace's publication notice was sufficient. ld. at *10.
Grace did not have an obligation to conduct a search to determine the former and current owners

of approximately thirty sites where Grace asbestos-containing vermiculite was processed. ld.
In reaching this conclusion, this Court rejected the argument that current and former

owners were entitled to actual notice, because such a rule would require Grace to "search for

numerous curent and prior owners at numerous sites," which exceeds the required "reasonable

diligence." ld. This Court properly relied on the Third Circuit's decision in Chemetron Corp. v.
Jones, 72 F.3d 341,348 (3d Cir. 1995)("(c)reditors canot be required to provide actual notice to

anyone who potentially could have been affected by their actions; such a requirement would

completely vitiate the important goal of prompt and effectual administration and settlement of
debtors' estates.").

The same result is paricularly appropriate here. The Debtors would have been required
to conduct searches for thousands of

buildings where Grace asbestos containing building

materials might have been installed. The claims were filed in the names of the buildings, not in
7 See Proofs of

Claim for the fort-four claims, at items 32 though 77 at Grace's May 17,2007 CounterDesignation ofItems to be Included in the Record.

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the names of or on behalf of legal entities that are capable of

being creditors in this Chapter 11.

See, e.g., Claim No. 10516 (filed by S&R for the "Foxridge Offce Building"); Claim No. 10534

(filed by S&R for the "First National Ban Building"); Claim No. 10696 (filed by S&R for the
"Pierre Laclede Building"). "Reasonable diligence" does not require such a broad search to "to
search out each conceivable or possible creditor and urge that person or entity to make a claim

against it." Chemetron, 72 F.3d at 346, quoting In re Charter, 125 B.R. 650,654 (M.D. Fla.
1991). And, Debtors ceased manufacturng the products at issue almost thirty years before the
Bar Date. In the ensuing decades, buildings were demolished, sold and changed hands, often
repeatedly. That is exactly why publication notice, rather than actual notice, is held to be legally
adequate for these types of potential claimants.

CONCLUSION

For the foregoing reasons, the Banptcy Cour's opinion should be affirmed.
August 20, 2007

KIAN & ELLIS LLP
David M. Bernick, P.C.
Janet S. Baer

Lisa Esayian Samuel L. Blatnick 200 East Randolph Drive Chicago, Ilinois 60601 (312) 861-2000

And

aura Davi nes (Bar No. 2436)

James E. O'Neil, III (Bar No. 4042 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705 (302) 652-4100
Co-Counsel for the Debtors and Debtors in Possession
24

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Page 1 of 6

IN THE UNITD STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWAR

In re:

W. R. GRACE & CO., et aI.,

) ) ) )

Civil Action No. 07-287 (RB) Hon. Ronald L. Buckwalter United States District Judge (by special designation)

Debtors.

) )

Bankrptcy Case No. 01-01339 (JK)

CERTIFICATE OF SERVICE
I, Laura Davis Jones, hereby certify that on the 20th day of August, 2007, I caused
a copy of the following document to be served on the individuals on the attached service listCs) in

the manner indicated:
Appellees' Brief

./

91 ioO-OOI\DOCS_DE:125703.71

Case 1:07-cv-00287-RLB

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Page 2 of 6

WR Grace FAX Core Group, Speights, Loizides Service List

Case No. 01-1139 (JK
August 20, 2007
Document # 130169

Facsimile 305-374-7593 Scott L. Baena, Esquire (Official Commttee of Property Damage Claimants) Facsimile 212-715-8000
Philp Bentley, Esquire

20 - Facsimile
Facsimile 302-426-9947 Mark T. Hurford, Esquire Marla Rosoff Eskin, Esquire Matthew G. Zaleski, il, Esquire (Counsel for Asbestos Personal Injury Claimants)
Facsimile 302-658-6548 Mark D. Collns, Esquire (Counsel for The Chase Manhattan Bank) Facsimile 312-861-2200 Janet S. Bear, Esquire (Counsel to Debtor)
Facsimile 302-658-6395 Steven M. Yoder, Esquire
(Lcal Counsel to DIP Lender)

(Counsel for Equity Commttee)

Facsimile 312-993-9767 J. Douglas Bacon, Esquire (Counsel to DIP Lender)
Facsimile 302-657-4901 Michael R. Lastowski, Esquire (Counsel to Official Commttee of Unsecured Creditors) Facsimile 973-424-2001 Willam S. Katchen, Esquire (Counsel to the Official Commttee of Unsecured Creditors)

Facsimile 302-552-4295
Teresa K.D. Currer, Esquire

(Counsel to the Equity Commttee)

Facsimile 302-573-6497 David Klauder, Esquire (United States Trustee)
Facsimile 410-531-4545 Mark Shelnitz (W. R. Grace & Co.)

Facsimile 202-429-3301 Peter Van N. Lockwood, Esquire Albert G. Lauber, Esquire Nathan D. Finch, Esquire Max C. Heerman, Esquire (Counsel for Asbestos Personal Injury Claimants)

Facsimile 212-644-6755 Elihu Inselbuch, Esquire Rita Tobin, Esquire (Official Commttee of Personal Injury Claimants) Facsimile 212-806-6006
Lewis Krger, Esquire

Facsimile 302-655-4210 John C. Phillps, Jr., Esquire (Counsel to David T. Austern as Future
Claimants' Representative)

(Offcial Commttee of Unsecured
Creditors)

Facsimile 202-339-8500 Roger Frankel, Esquire Richard H. Wyron, Esquire Matthew W. Cheney, Esquire (Counsel to David T. Austern as Future
Claimants' Representative)

Case 1:07-cv-00287-RLB

Document 8-2

Filed 08/20/2007

Page 3 of 6

Facsimile 302-575-1714 Michael B. Joseph, Esquire
Ferr & Joseph, P.A.

(Counsel for Property Damage Claimants)

Facsimile 803-943-4599 Daniel A. Speights, Esquire Maron C. Fairey, Jr., Esquire (Counsel for varous PD Claimants)

Facsimile 302-654-0728
Chrstopher D. Loizides, Esquire

(Counsel for Varous PD Claimants)

Case 1:07-cv-00287-RLB

Document 8-2

Filed 08/20/2007

Page 4 of 6

W. R. Grace Email Core Group, Speights, Loizides Service List

Case No. 01-1139 (JK)
Document Number: 130168

Electronic Delivery meskin&Jdel.camlev.com mhurford&Jdel.camlev.com
(Lcal Counsel to Asbestos Claimants)

20 - Electronic Delivery
(Counsel to Debtors and Debtors in Possession) Laura Davis Jones, Esquire
James E. O'Neil, Esquire

Marla Eskin, Esquire Mark T. Hudord
Campbell & Levine

800 North King Street, Suite 300 Wilmington, DE 19801
Electronic Delivery Collins&JRLF.com (Counsel for The Chase Manhattan Bank)

Pachulski Stang Ziehl Young Jones &

Weintraub lLP
919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705
(Copy Service)
Parcels, Inc.

Vito L DiMaio 10th & King Streets Wilmington, DE 19801
Electronic Delivery

Mark D. Collns, Esquire Deborah E. Spivack, Esquire Richards, Layton & Finger, P.A. One Rodney Square P.O. Box 551 Wilmington, DE 19899
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m;osevh &Jferr;osevh.com

mlatowski&Jduanemorrs.com rrlev&Jduanemorrs.com (Counsel to Official Commttee of Unsecured Creditors) Michael R. Lastowski, Esquire Richard W. Riley, Esquire Duane, Morrs & Heckscher LLP
1100 North Market Street, Suite 1200 Wilmington, DE 19801-1246
Electronic Delivery svoder&Jbavardfirm.com
(Lcal Counsel to DIP Lender)

(Counsel for Property Damage Claimants) Michael B. Joseph, Esquire Ferry & Joseph, P.A. 824 Market Street, Suite 904 P.O. Box 1351 Wilmington, DE 19899
Electronic Delivery David.Klauder&Jusdo;.f!ov (Uhited States Trustee) David Klauder, Esquire

Offce of the United States Trustee 844 King Street, Room 2311 Wilmington, DE 19801
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Steven M. Yoder, Esquire The Bayard Firm 222 Delaware, Avenue, Suite 900 P.O. Box 25130 Wilmington, DE 19899

currier&Jklèttoonev.com
(Euity Commttee Counsel)

Teresa K. D. Curer
Klett Rooney Lieber & Schorling
1000 West Street, Suite 1410

Wilmington, DE 19801

Case 1:07-cv-00287-RLB

Document 8-2

Filed 08/20/2007

Page 5 of 6

Electronic Delivery ibaer&llårkland.com

Electronic Delivery

dbernickêkirkland.com
(Counsel to Debtor) David B. Bernick, P.C. Janet Baer, Esquire Kirkland & Ells LLP 200 East Randolph Drive Chicago, IL 60601
Electronic Delivery

sbaenaêbilzin.com (Offcial Commttee of Property Damage
Claimants) Scott L. Baena, Esquire Member Bilzin Sumberg Dunn Baena Price & Axelrod LLP First Union Financial Center 200 South Biscayne Blvd, Suite 2500
Miam, FL 33131

mark.shelnitê1!race.com
CW. R. Grace & Co.)

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Mark Shelniz W.R.Grace and Co. 7500 Grace Drive Golumbia, MD 21044
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pbentlevêkramerlevin.com tmaverêkramerlevin.com
(Euity Commttee Counsel)
Philp Bentley, Esquire

lkru1!erêstroockcom krasiiualeêstroock.com (Official Commttee of Unsecured Creditors)
Lewis Krger, Esquire

Thomas M. Mayer, Esquire Kramer Levin Naftalis & Franel LLP 1177 Avenue of the Americas New York, NY 10036
Electronic Delivery pvnl&Jcapdale.com ndf&Jcapdale.com
tws &Jcapdale. com

Kenneth Pasquale, Esquire Stroock & Stroock & Lavan LLP 180 Maiden Lane New York, NY 10038-4982
Electronic Delivery

iwd&Jcapdale.com