Asbestos claimants on Thursday asked a federal appeals court to dismiss the Chapter 11 bankruptcy filing of a Georgia-Pacific subsidiary, arguing that the corporate spinoff is not a debtor under the U.S. Constitution and therefore a bankruptcy judge lacked jurisdiction.
The claimants, who say they were exposed to asbestos from Georgia-Pacific’s products, argue that Article I’s Bankruptcy Clause only allows entities that cannot pay debts due to a threat to their economic viability to file for bankruptcy. The paper and packaging company’s Bestwall subsidiary does not fit the Founding-era concept of a bankrupt debtor, the claimants contend.
