Michael Herlihy v. DBMP, LLC - Asbestos Claims in Bankruptcy

PUBLISHED UNITED STATES CO URT OF APPEALS FOR THE FOURTH C IRCUIT No. 24-2109 MICHAEL N. HERLI HY; ANN HERLI HY; THE ESTATE OF PETER L. BERGRUD, Claimants - Appellants, v. DBMP, LLC, Debtor - Appell ee. ----------------------------------------- OFFICIAL COMMIT TEE OF ASBESTOS P ERSONAL INJURY C LAIMANTS OF DBMP, LLC, Amicus Supporting Ap pellant. Appeal from the Unite d States District Court for the We stern District of North Carolina, at Charlotte. Kenneth D. Bell, District Judge. (3:24- cv -00558-KDB) Argued: October 2 2, 2025 Decided: February 11, 2026 Before NIEMEYER, K ING, and HARRI S, Circuit Judges. Affirmed by published opinion. Judge Niemeyer wrote the opinion, in which Judge Harris joined. Judge King wr ote a dissenting opinio n.

2 ARGUED: Jonathan Ruckdesche l, THE RUCKDESCHEL LA W FIRM, LLC, Ellicott City, Maryland, for Appellants. C. Kevin Mar shall, JONES DAY, Washington, D. C., for Appellee. ON BRIEF: Thomas W. Wald rep, Jr., Chris W. Haaf, Diana S. Johnson, WALDREP WALL BABCOC K & BAILEY PLLC, Winston - Sale m, North Carolina; John L. Steffan, St. Lou is, Missouri, Clay ton L. Thompson, MAUNE RAICHLE HA RTLEY FRENCH & MUDD, LLC, New York, Ne w York, for Appellants. Gregory M. Gordon, Dallas, Texas, Jeffrey B. Ellman, Atlan ta, Georgia, Sarah Welc h, JONES DAY, Cleveland, Ohio; Garland S. Cassada, Richard C. Worf, ROBI NSON, BRAD SHAW & HINSO N, P.A., Charlotte, Nor th Carolina, for Appellee. Na talie D. R amsey, Davis Lee Wright, ROBINSON & CO LE LLP, Wilmingt on, Delaware; Ke vin C. Macl ay, Todd E. Philli ps, Jeffrey A. Lieseme r, CAPLIN & DR YSDALE, CHARTERE D, Washington, D.C., for Amicus Curiae.

3 NIEMEYER, Circuit J udge: Michael Her lihy, his wi fe Ann Herlihy, an d the Estate of Peter Berg r ud are plaintiffs in asbestos - grounded tort actions agai nst DBMP LLC, and their actions have been aut omatically stayed by DBMP’s filing of this Chapter 11 bankruptcy proceeding, pursuant to 11 U.S.C. § 362(a), a s well as by a preliminary injunction t hat the bankru ptcy court entered to give effect to the stay. The plaintiffs filed motion s to lif t the stay and to stay t he preliminary injunction, urging that they be allowed to prose cute their asbest os claims against the debtor before a judge and jury in th e traditional tort system. They justified their request with the argum ent that D BMP obtained the stay “ in bad faith ” because it is “non - distressed, massively wealthy, and full y capable of paying all clai ms in full,” and therefore it was not entitled to in voke bankruptcy pr otection and the automa tic stay that it provides. The bankruptcy court denied the motion s, ap plying the factors for deciding such motions from our long standing precedent of I n re Ro bbins, 96 4 F.2d 342 (4th Cir. 1992). The court found tha t lifting the stay would pr ejudice the debtor’s es tate, reduce jud icial economy by flooding t he tort system with as bestos cases, and “imperil” the ability of the court to “treat consist ently and fairly all similarly situa ted claimants in a 524(g) p lan.” See 11 U.S.C. § 524(g) (authorizing a specific and unique Chapter 11 reorganization proceeding for debtors with a lar ge number o f pending and fut ure personal injury claims based on exposure to asbestos - co ntaining products). The bankruptc y court also obser ved that lifting the autom atic stay would amount to a de facto dismiss al of the bankr uptcy proceeding. Finally, t he court foun d that the plaintiffs had failed to demonstrate that DBMP acted in bad fai th.

4 On appeal, the district court found that the bankruptcy court had not abused i ts discretion in den ying the plaintiffs’ mot ion s to lif t the automatic stay and acc ordingly affirmed the bankruptc y court by order dated October 28, 2 024, relying on the bank ruptcy court’s factual findings and rulings of law. W e affirm that order, concluding that the bankruptcy court did not abuse it s discretion in refusing to lift the automatic sta y on finding that DBMP filed its Chapter 11 petition with the legitimate purpose of p ursuing a § 524(g) plan, that it qualified for such a reorganization, and that the plaint iffs failed to present an y evidence that DBM P had acted in bad faith. I During the period fro m the 1930s to the 1990s, CertainTeed Corporation was engaged in the man ufacture and sale of various buildi ng products tha t contained asbestos, including cement pip e, asphalt roofing products, gyps um products, an d railroad ins ulation products. In the 1970 s, it bega n facing hun dreds of thousands of asbestos - related tort claims based on allegations that its produc ts released asbestos that caused asbesto si s and mesothelioma, thereby c aus ing injury to the plaintiffs in those claims. Although CertainTeed was a rela tively minor defendant in the early waves of large - scale asbestos litigation, once the primary as bestos manufac turers began pursuing bankruptcy protection in the 2000s, the volume of claims against CertainTeed su bstantially increased. Whil e CertainTeed paid out less than $10 million per year in asbestos- relate d claims in the 1990s, since 2002, i t h as spent an average of $80 million pe r year in pay ments to reso lve such

5 claims, as well as an additional $20 to $ 30 million per year in lega l defense costs. In to tal from 2002 until 2019, the company incurr ed roughly $2 billion in expenses defending and resolving over 300,000 asbestos lawsuits, an d it paid approximately $1.5 billio n of that sum out of pocket after exhausting its asbestos - related insurance cove rage. Moreover, a s of 2019, CertainTeed s till faced approximatel y 60,000 pending asbestos- related claims in courts nationwide, wit h projections that such lawsuits would continue to be filed for “decades to come.” In the fall of 2019, CertainTeed determined that it would take advantage of the § 524(g) reorga nization provision of the Bankruptcy C ode, which was ena cted in 1994 specifically to manag e and resolve ongoin g and future asbesto s - related claims in circumstances like tho se facing Certain Teed. The § 524(g) proced ure involves coll ecting all pending and future claims in a bankruptcy c ourt and establishing a trust to p ay the future claims on a basis equal to the pending claims. As the House Re port for the § 524(g) legislation explained, “ The asbestos trust/inju nction mechanism esta blished in the bill is available for use by an y asbestos company fa cing a similarly overwhelming liability” as faced by Johns - Manvil le in the 1980s — wh ose circumst ances, as described, were similar to those facing CertainTeed in 2019. H.R. Rep. No. 103 -835, a t 40 – 41 (1994), as reprinted in 1994 U.S.C.C.A.N. 3340. To engage the process, CertainTeed split itself into two companies under Texas corporation law — which is curiously referre d to as a “divisional m erger” — by forming two new entities and assign ing to the m CertainTeed’s lia bilities and a ssets. See Tex. B us. Orgs. Code Ann. § 1.002 (A)(55); see also ge nerally id. § 10.001 et seq. One corporation

6 was called Certain Teed (“New CertainTeed”) and the other, DBMP LLC, and u nder the procedure, the ori ginal CertainTeed (no w “O ld CertainTeed ”) c eased to exist. In the divisional merger, O ld CertainTeed assigned all of its asbestos liabilit ies to DBMP, as well as $25 million in cash and all the equity of a ca shflow - producing si ding and trim business, Millwork & P anel, whi ch had projected earnings before taxe s of $1 6 million in 2020 and an estimated fair mar ket value of $150 milli on. It assigned i ts remaining liabilities an d assets to the N ew CertainTeed. At the same time, DB M P and New CertainTeed en tered into an uncapped funding agreement t hat obligated New CertainTee d to satisfy DBMP’s asbestos- related liabili ties and, in case of bankruptcy, t o pay for all costs related to administering a Chapte r 11 reorgan ization, including the cost of resolving asbest os -related claims through a trust under 11 U.S.C. § 5 24(g). Under this a greement, none of Old CertainTeed’s assets were protec ted from lia bility to pay the asbestos claims, bu t th os e claims were isolated so that they could be man aged under a § 524(g) plan. After this division of li abilities and assets and the creation of the uncapped fundin g agreement, DBMP file d a Chapter 11 re organization pe tition to avail itself of the § 52 4(g) process. The lawyers in these types of proceedin gs ofte n, and perhaps pe joratively, refer to the divisional merger and bankruptcy filing as the “Texas Two- Step,” referri ng to a common country weste rn dance involving two quick step s and two slow. As the result of the Ch apter 11 bankruptcy fil ing, all asbestos - relate d state law tort claims against DBMP were automatically stayed pursuan t to 11 U.S.C. § 362(a), and the bankruptcy court, in a ddition, entered a preliminary injunction that prohibited claiman ts

7 from bringing asbest os claims against New Certain Teed, affiliated entitie s, and Ol d CertainTeed ’s distribut ors. After the bankruptcy court appointed the Official Committee of Asbestos Personal Injury Claimants an d the Future Claimants ’ Representative (collectively “the Com mittee”), the Committ ee filed a mot ion to lift t he automatic stay, a s well as an objection to the preliminary injunct ion. The motion sought to permit all asbestos claims against DB MP to be prosec u ted before a judge and jury in the t raditional tort system in the various States an d to be paid from corpo rate assets as would any tort judgment. The bankruptcy c ourt conducted hearings on the Committee’ s motion and objectio n over a period of five days in Marc h 2021. Th e hearings included opening statement s and arguments from the parties, live t estimony from expert witnesses on financial and restructuring matters, and proffers of the parties’ evi dence, including DBMP’s declarations, depositio n designations, and va rious exhibits. After t he hearing s, DB MP offered a stipulation tha t the personal injury cla ims of any claimant w ith a pending asbestos cl aim shall be pres erved, with no impairment o f damages, even if the c laimant subsequently dies. In a thorough 7 9 - page opinion dated August 10, 2021, the bankruptcy court first denied the motion to lift th e automatic stay and issued an ord er recognizing that the asbestos claims against DBMP, includin g those formerly against Old CertainTeed, were subject to the auto matic stay under 11 U.S.C. § 36 2(a)(1) and/or § 105. The c ourt then ordered that the preliminary inju nction prohibiting claimants fro m bringing asbestos - related claims against New CertainTeed, a ffiliated entities, and Old Certain Teed’s distributors be maintained while the reorganiz ation case proceeds. In denying the lift-st ay

8 motion, the bankruptcy court considered and applied the fa ctors from In re Robbins, 964 F.2d 342 (4th Cir. 1992), finding that lifting the stay would prejudic e the debtor’s estate by depleting estate res ources and causing irreparable harm to the reorganization effort; would negatively impact judicial resourc es by “dumpin g more than 7 0,000 asbestos cases back into the tort syste m”; and would contrav ene Congress’ clear purpose of establish ing a “mechanism to resolve . . . asbestos liabili ties in a single forum” through 11 U.S. C. § 524(g). No party appealed th i s ruling, nor did an y party file a motion t o dismiss the bankruptcy case outright. Since the court’s ruling in 2021, litigation has continued in the bankruptcy case thro ugh various adversary proceedings, and the bankruptcy cour t has approved a process for estimating DBMP ’ s a ggregate liability a nd ordered the parties to mediate a possible reso lution of the Chapter 1 1 case. Several years later, in April 2024, Mi chael Herlihy, Ann Herlihy, an d the estate of Peter Bergrud (the “Cla imants”) filed motions to lift the stay, but only on their own behalf, to allow them to prosecute their tw o asbestos s uits agai nst DBMP in state courts in Washington and Calif ornia. The Cla imants are but three of the tens of t housands of plaintiffs who filed asbestos-related t ort claims against Old CertainTeed and/or its variou s subsidiaries, pre decessors, successors, or relat ed companies. Michael He rlihy worked for about a decade for a saw sharpening company, and he regularly breathed in asbestos while sharpening saw blades t hat had been used in a CertainTeed cement pi pe plant. Herlihy was diagnosed with mesot helioma in 2023. Peter Bergrud worked for decades in the construction industry, and he regularly cut, beveled, and dri lled CertainTeed’s as bestos -

9 infused cement pipe. Bergrud died from mesotheliom a in 2019. In addition to the ir pending tort claims against DBMP, the se Claimants also have pendi ng claims, at various stages of litigation, aga inst other asbestos defe ndants. In their motion s to lif t the stay, the Claimants contend ed that D BMP filed its bankruptcy petition in bad faith, arguing th at the Texas Two- Step process consti tuted subjective bad faith be cause even though DB MP and New CertainTeed are “we althy and fabricated debtors, [who] boast the ability to p ay all claims in full,” they are using Chapter 11 not to reorganize but to den y Claimants the right to prosecute their claims in state court, thus delaying their pote ntial recovery. On May 28, 2024, t he bankruptcy court denie d the C laimants’ mot ion s to lift the stay. In doing so, th e court incorporated its e arlier rejection of the motion to lift the stay filed by the Commit tee in August 2021 and recognized th at it had alread y rejected “ substantially identical requests” on at least fou r occasions in other divisional merger cases before it. Even so, the court considered, as it did in 2021, each of the Robbins factors again, finding that granting the motion s to lift the sta y would preju dice the debtor’s es tate, reduce judicial economy by flooding the tort sy stem with asbestos cases, an d “imperil” the ability of the court to “treat consistently and fairly all similarly situated claimants in a 524(g) plan.” The court further found that lifting the automatic stay wou ld amount to a de facto dismissal of the bankru ptcy. Finally, it concluded that the Claimants had failed to present any evidence that D BMP had filed in ba d faith. On appeal, the district court affirmed the ba nkruptcy court, and fr om the district court’s order dated Oct ober 28, 2024, the Claimants filed this ap peal.

10 II The narrow question pr esented on appeal is w hether the bankruptcy court properly denied the Claimants’ motions for relief from the a utomatic stay, filed pursuant to 11 U.S.C. § 362(d). To be clear, we do not have before us any motion to dismiss the Chapter 11 petition so as to challenge wheth er Chapter 11’s § 524(g) reorganization proced ure ha s been appropriately inv oked in this case. N or do we have the questi on before us whether the pre-bankruptcy Texas Two - Step process is appropriate or legal. Indeed, we also do not have before us the more fundamental questi on of whether Con gress had constitutional authority to enact § 524(g) without requi ring a showing of “insolvency.” Thus, in this presumptively vi able Chapter 11 pr oceeding, we a ddress on ly the standard for l ifting a § 362(a) stay and whet her the district court co rrectly applied that stan dard. * To begin, the Bankrup tcy Code provides that when a bankru ptcy petition is filed, all judicial actions against the debtor are auto matically stayed. 11 U.S. C. § 362(a)(1). Such a stay provides the ba nkruptcy court with the “opportunity t o harmonize the interest s of both debtor and cred itors while preserving the debtor’s assets for repayment and reorganization of his or her obligation s.” Robbins, 96 4 F.2d at 345. The s tay thus serves the fundamental pur poses and functions of bankruptcy. * Many of the issues t hat the dissent raises and argues w ere not c onsidered and decided by the district court, such as a would - be petition to dism iss the proceeding to challenge whether it properly invo ked § 52 4 (g) and, indeed, the Texas Two - Step process. See J.A. 1187 (where the district court simil arly clarified “w hat issues are and a re not before the Court in this appeal” from the bank ruptcy court, noting tha t many of the issues that the dissent raises were not before the c ourt).

11 Nonetheless, a bankruptcy court may, in its discretion, grant rel ief from the automatic stay if a party is able to demonstrate “cause, including t he lack of adequate protection of an interest in property of such par ty in interest.” 1 1 U.S.C. § 362(d). Because “cause” is not otherw ise defined, we have concluded that bankruptcy co urts “must determine when [such] discretionary relief is appropria te on a case -by-case b asis.” Robbins, 964 F.2d at 3 45. But the term is not unmoor ed. We have pr ovided a standard to apply the term, dra w ing limitations from context. Keeping in mind t hat a § 362(a) stay is designed to give the ba nkruptcy court the abili ty “to harmonize the int erests of both debtor and creditors while preserving the debtor ’s assets for repayment and reorganizatio n of his or her obligations” — which imitates a fundamental function of bankruptcy — removal of such a stay must, at bottom, addres s what the stay provided. Id. Thus, as pointe d out in Robbins, when conside ring a motion to lift an automatic stay, “[t]he court must balance p otential prejudice to the bankruptcy de btor’s estate against the ha rdships that will be incurred by the person seeking relief from the automatic stay if relief is denied.” Id. And accordingly, t he factors to weigh are, on on e side, the efficiencies in resolv ing the matter sought to be released from the stay in ano ther court, assessi ng whether that court could handle the matter more efficiently and th ereby provide judicial economy to the bankruptcy court, and, on the othe r side, whether the estate can still be protect ed for the benefit of creditors. See id. As a rticulated in Robbins, t hese relevant factors in clude: (1) whether the i ssues in the pending litigatio n involve on ly state law, so the expertise of the bankruptcy court is unnecessary; (2) whe ther modifying the stay will promote j udicial economy and whether t here would be greater interference with the bankruptcy case if the stay were not lifted because matters would ha ve to be lit igated in bankruptcy court;

12 and (3) whether the estate can be protecte d proper l y by a requirement that creditors seek enforce ment of any judgmen t through the bankrup tcy court. Id. F or decades, courts in this circ uit have rec ognized Robbins as the controlling authority for deciding motions to lift an automatic stay. See, e.g., In re Lee, 461 F. App’x 227, 231 – 33 (4th Cir. 20 12) (applying th e Robbins factors to determine whether the bankruptcy court abused its discretion w hen granting relief fro m an automatic stay); I n re McCullough, 495 B.R. 692, 697–98 (W. D.N.C. 2013) (same). After carefully review ing the bankruptcy court’s opinion, we conclude tha t it appropriately applied Robbins. It did so bot h when it first ruled on the lift-stay motion filed by the Commit tee in August 2021 a nd again when it ru led on the Claima nts’ similar motions in May 2024. The court found that granting the motions to lif t the stay would “greatly” prejudice the debtor’s estate and that such harm would outweigh any harm to the Claimants that might be cause d by any dela y in the r esolution of t heir asbestos claims. More particularly, the court reasoned that granting the stay w ould reduce judicial econom y by releasing a wave of asbestos cases back int o the court system, severely underminin g the bankruptcy court’s ability to “ treat consiste ntly and fairly a ll similarly situate d claimants in a 524(g) plan.” The court was particularl y concerned that granting the stay would imperil its ability to pr otect the interests of future asbestos claimants through the § 524(g) plan. A n d based on its experience with similar mass - to rt bankruptcies, it pre dicted that lifting the stay would “ effectively destroy the bankruptcy case.” The court also found that any delays that might o ccur in the resolution of the Claimants’ suits in bankruptcy provided an insufficient b asi s to lift the s tay as such a pro position was speculati ve. The court pointed

13 out that, given the high volume of asbes tos - related cases against the d ebtor, proceed ing in the state court system would likely also result in substantial delays. I ndeed, it noted that i f the parties to DBMP’s § 524(g) reorganizat ion were to work toward the goals of the reorganization in good faith, resolution of the Claimants’ claims in bankruptcy could be even faster than their re solution in state courts. Thus, the bankr uptcy court not only applied the Robbins factors correctly, b ut it provided extensive ex planation as to why thos e factors suggest t hat granting the m otion to lift the stay would unde rmine the entire bankru ptcy proceeding. While the C laima nts do not seem to c hallenge the bankru ptcy court’s analysis u nder Robbins, they argue tha t Robbins is not disposi tive because it did not address its argument that DBMP acted in b ad faith in filing the Chapter 11 pe tition to obtai n a stay. As f or their bad faith argument, t he C laimants contend that DBMP filed for ba nkruptcy as a “pr ofitable, non- distressed” compa ny and that the bankrup tcy court should have g ranted relief from the automatic stay on that basis. According to Cl aimants, the Certa inTeed divisio nal merger was an attempt to lever age bankruptcy’s automatic stay s o as to force them “into judiciall y compelled re - negotia tions of state law lia bilities,” and this use of bankruptcy by a compa ny that is not in financia l distress constitutes sufficient bad fait h and justifies lifting the automatic stay. First, we agree that Robbins did not address whether a showing of bad fait h w ould justify lifting t he stay. That issu e was not pres ented t o the Robbins court. B ec ause § 362(d) only requires a finding of “cause,” Robbin s focused textually o n that term, holding th at “cause” related to the purposes of the automatic stay and t he effect of lifting it.

14 Nonetheless, w e also agree wit h Claimants th at good faith is an implied requirement for obtaining an automatic stay and that a sho wing of a lack of good faith, or bad fa ith, can therefore justify lifting the stay. To reach this conclusio n, we begin by addressi ng the larger cont ext. B ankruptcy is an equitable pr ocedure that is available to thos e who employ its benefits in good faith. And while what amounts to good faith or bad faith is ultimatel y contextual, it surely begins with resolution of the question whether the bankr uptcy procedure is bein g used in accordance with its designed purpose. See Carolin Corp. v. Miller, 886 F.2d 69 3, 698 (4th Cir. 1989). When a debtor manipulates the bankru ptcy procedure for some ot her purpose or steps outside the equitable limitations of the Bankruptcy C ode, his good faith comes into question, placing in do ubt any relief he seeks i n bankruptcy. Id. at 699 (citing In re Albany Partners, Ltd., 749 F.2d 670, 674 (11th Cir. 1984)). T hus, t he requir ement of good faith permeates the entire B ankruptcy C ode. See, e.g., In re Premi er Automotive Servs., 492 F.3d 274, 2 79 (4th Cir. 2007); Carolin, 886 F.2d at 698–70 0; Fed. R. Bankr. P. 9011(b); Collier o n Bankr uptcy § 362.073. I n light of this, it follows that wh en a bankruptcy court addresses a motion to dismiss a Chapter 11 petition under 11 U.S.C. § 1112(b) (authorizi ng dismis sal “for cause”), it may consider a lack of good faith a s implicit in the “cause” r equirement. Carolin, 886 F.2d at 699. And in a similar vein, we a lso observed in Caroli n, albeit in dictum, tha t the same principle would apply when de termining “cause” on a motion to lift t he automatic stay und er § 362(d). Id.

15 But a bad-fa ith cause f or dismissal of a petition or for granting a motion to lif t the automatic stay is not without boundaries. O therwise, it could subsume and frustra te explicit statutory requirements. Thus, we have noted tha t the lack -of-good-faith requirement implied in “cause” in both § 1112(b) and § 362(d) require s the movant to show both subjective bad faith and objective futi lity. Premier, 492 F.3d at 2 79 –80; C arolin, 886 F.2d at 700 –01. T he subjective bad faith inquiry focuse s on the question whether a petitioner actually intends to use the applicable provision for its intended purpose, i.e., in a Chapter 11 proceeding, “ to reorganiz e or rehabilitate an exis ting enterprise, or to preserve going concern v alues of a viabl e or existing b usiness. ” Carolin, 886 F.2d at 702 (cleaned up). A nd the objective futility inquiry focuses on the question whethe r “there is embodied in the petition some relation to the st atutory objective of resuscitating a financially trou bled debtor. ” Id. at 701 (cle aned up). In this case, the bankruptcy court, whe n denying the Claimants’ moti on s to lift the stay, addresse d not only the Robbins stan dard but also the Claimants’ bad faith argument. It found that there was a lack of evidence in the record of subjective bad faith, and even if there were such evidence, the Cla imants had failed to meet t he objective futility requirement. T he court explained, “ I don’t fee l comfortable making t hat conclusion today [on subjective bad faith], not on this record or at this stage in the case. ” (Emphasis added). Yet when address ing the Claimants ’ argument that a non - distres sed, solvent company’s use of bankruptcy tool s necessarily amount s to bad faith, it respon ded that the answer “appears to be no.”

16 We agree with the ban kruptcy court that the record does not i nclude evidence to suggest bad faith. D BMP w as legitimately seeking to invoke the § 524(g) process authorized by Congre ss to a ddress the circu mstances in which it faced 60,000 p ending asbestos- related claims and expected to receive a conti nuous flow of such lawsuits for decades to come. That circumstance w as precisely the kind that prompted Con gress to enact § 524 (g). It wou ld be hard to argue that DBMP had subjective bad faith in seeking t he protection that the statute pr ovided. And clearly, its invocation of that proced ure has not, as of now, been sh own to be futile. Indee d, the ba nkruptcy court found that there was a reasonable possibilit y of succe ss in pursuing a § 524 (g) plan. A trust h as been create d, as required by the statute, and the promi se has been made for the equitable treatment of all asbestos claimants, bot h present and future. Moreover, t he s uggestion that DBMP’s pursui t of such a plan is futile is belie d by the Supreme Court ’s observations in the r ecent decision of Truck Ins urance Exchang e v. Kaiser Gypsum Co., 602 U.S. 26 8, 273 (2024). In Truc k Ins urance, the Court explaine d that Congress responde d specifically to the ch allenge of asbesto s liability and the uni que latency of asbestos - rel ated diseases in enacting § 524(g) of the Bankruptcy Code. It observed that § 524(g) “allows a Chapter 1 1 debtor with substantial asbestos - related liability to establish and fund a trust that assu mes the debtor’s ” asbestos- related liability and that the s ection “c hannels all present and future claims int o the trust by enjoining entities from taking legal action fo r the purpose of directly or indirectly collecting, recovering, or receivin g payment or recovery for claims” that will be paid by the trus t. Id. at 273–74 (cleaned up). The Court adde d that this scheme “ensure[s] that health cla ims

17 can be asserted only against the Tru st and that [the compan y’s] operating entities will be protected from an onslaught of cr ippling lawsuits tha t could jeopardize the e ntire reorganization effort.” Id. at 274 (cleaned up) (quoting Kane v. J ohns - Manville Corp., 843 F.2d 636, 640 (2d Cir. 1988)). In short, th e Court recognized that circumstances such as those of DBMP are what § 524(g) so ught to address. Indeed, b y its terms, § 524(g) applies to a debtor “likely to be subject to substantial future [asbe stos - related] demands for payment. ” 11 U.S.C. § 524(g)(2)(B)(ii)(I). Here, DBMP filed for bankruptcy du e to substantial asbestos liabili ties, as it had incurred over $2 billion to resolve hundreds of thousands of asbe stos claims since 20 02 and was still fac ing mo re tha n 60,000 a sbestos claims, with more to come. Thus, DBMP’s efforts to pursue reorga nization and address asbestos liabilit y through a § 524(g) trust were consistent with the congressional purpo se and design of that provisio n, and, as s uch, “the purposes of the Code would be furthered” by DBMP’ s bankruptcy p etition. Carolin, 886 F.2d at 701. The C laimants have not c ontradicted these facts, which show an absence of futility. The C laimants make much about the ability of Old CertainTeed, New CertainTeed, and DBMP to pay the asbestos claim s wit hout the need of filing a Chapter 11. They characterize DBMP as a “profitable, non - distr essed” company, sugge sting that the use o f Chapter 11 is some how wrong in such circu mstances. But this fac t is irrelevant to th eir bad faith argument. The statuto ry authority f or a company to pu rsue a § 52 4 (g) plan in a Chapter 11 reorganiza tion does not require a showing of “insolve ncy,” see 11 U. S.C. § 524(g)(2)(B), which is in contrast to other p rovisions of the Ban kruptcy Code, s ee, e.g.,

18 id. § 109(c) (requiring munic ipal debtors t o be insolvent when pursuing a Chapter 9 proceeding). Rather, in enacting § 524 (g), Congress re cognized a different form of financial distres s, explaining t hat companies in a situation li ke DBMP ’s face “l ingering uncertainty in the financial community,” which mak es it more diffi cult for them to meet the needs for capital. H.R. Rep. N o. 103 -83 5 (1994), at 40. And, as it explained, this lingering uncertainty f lows from the nature of asbestosis and mes othelioma, which can manifest themselves y ears after asbestos ex posure. See id. Moreover, Cong ress was concerned not only about the ability of a co mpany like DBMP to continue payin g future claims, but also the fairness of those paym ents to future clai mants, whic h c ould be undermined by the late ncy of the di sease. T he se purpo ses are the stuff of bankrupt cy and of § 524(g) in particula r. Our good colleague in dissent, however, rests his entire position fi nding bad faith on an underlying misunderstanding of the § 52 4 (g) proc edure. He rep eatedly characterizes it as an unfair “scheme” by whic h Old CertainTeed, which was an “ultra -wealthy ” corporation, was able “to evade asbe stos- related” civil tort liability by creati ng a “shell” company “DBMP,” assigning to it all asbestos liability, and then put ting that company into bankruptcy. In this manner, he s tates, Old CertainTeed was able to “plunder[] th at shell corporation” into ba nkruptcy. As he lame nt s, Old CertainTeed was able “to p lace its asbestos- related civil t ort claims involving those thousands of American wor kers behind the Bankruptcy Code’s firewall of protecti on.” Post at 40. And, he co ncludes, our opinion continues a “d i stressin g march into being the ‘ safe harbor ’ for the ‘ big g uys,’ ” by letting

19 Old Certain T eed act “through its stooge subsidiary, the Debtor DBMP . . . t o avoid accountability for their asbestos-related tort lia bilities.” Id. at 58. Regretfully, this argument completely mis understands the § 52 4 (g) process, which Old Certain T eed and New Ce rtainTeed in voked here. And in invoking th at process, Old CertainTeed and New CertainTeed d id not protect one singl e dollar from asbestos-related liability. To the contrary, § 52 4(g) provided a procedure designed to collect all of Old CertainTeed’s asbestos claims into ba nkruptcy and, from a required trust, pay those claim s, both past and future. The § 524 (g) process is quicker, more effic ient, and fairer than can be provide d by contin uing with widely disp ersed litiga tion in vari ous federal and state courts. But more important, and no t appreciated by the dissent, no asset from Old CertainTeed is protect ed from paying its as bestos claim ant s. Aft er Old CertainTeed transferred its remaini ng assets to New CertainTeed, New CertainTeed entered in to an uncapped funding agreement, com mitting all of its ass ets to payment of asbest os claims. Thus, while no assets are protected from as bestos liability, as the dissent e rroneously recites, in bankruptc y those assets are managed more fairly, so that each claimant is given a fairer opportunity for compensation, includi ng future claimants. This was Congre ss’s considered des ign of § 524(g), and the dissen t does not even acknowledge these various elements of fairness. And, of cour se, on this failure, it erron eously finds bad faith when § 524(g) is invoked. We conclude that the district court properly held that, in considerin g and denying the C laimants’ m otions to lift the automatic stay under § 362 (d), the bankruptcy court did not abuse its dis cretion. We have found no factual finding to be clearly erroneous and no

20 application of law to be in error such as would support a finding of ab use. See T.H.E. Ins. Co. v. Davis, 54 F.4th 805, 818–19 (4th Cir. 2 022). Accordingly, we affirm. AFFIRMED

21 KING, Circuit Judge, d issenting: Slowly but surely — and to my great regret — our Circuit has bec ome the “safe haven” for ultra - wealth y corporations seeking to evade asbesto s - related civil tort liability under the guise of the Bankruptcy Code. See, e.g., Bestwall LLC v. Off. Comm. of Asbestos Claimants of Bestwall, LLC, 148 F.4th 233 (4th Cir. 2025) (affirming denial of motion to dismiss for lack of su bject matter jurisdict ion Chapter 1 1 b ankruptcy filed b y debtor Bestwall seeking to ev ade asbestos - related to rt liabilities); In re Bestwal l LLC, 71 F.4th 168 (4th Cir. 2023) (affirming injunct ion extending protections of au tomatic stay to fully solvent non - debtor co defendant Georgia - Pacific for a sbestos - related tort li abilities). T oday’ s panel majority goes even o ne step further in cemen ting that unfortunate re putation. In the underlying “bankruptcy” proc eedings in the W estern District of North Carolina, the Estate of deceased Air Force veteran Peter Ber grud (the “Bergrud Estate”), along with Michael and Ann Herlihy, sought very limited relief from an automati c bankruptcy stay interposed agai nst any liquid ation of their asbesto s - related tor t claims in our Nation’ s state courts against the so - ca lled “Debtor” in bankruptcy, DBMP, LLC (“DBMP,” the “Debtor,” or th e “Debtor DBM P”), its parent, Cert ainT eed Corporation, and other corporate entities. The Bergrud Estate and the Herl ihys predicated their s tay relief request on DBMP’ s well - documen ted and extensive “ba d faith” su rrounding its Chapter 1 1 bankruptcy — an effort that was initiated af ter CertainT eed executed an in creasing ly - common scheme to shed itself of civil tort liability for asbestos - related claims. That scheme involved, inter alia, Certain T eed under going a “ T exas T wo - Step” corporate makeover in the State of T exas, assigning a ll of its existing asbes tos - related civil tort

22 liabilities to a newly formed front organizatio n (that is, DBMP), and then plundering that shell corporation into a Chapter 1 1 bankruptcy in western North Carol ina. 1 Notwithstanding those and other damning facts, the bankruptcy co urt denied the Bergrud Estate’ s and the Herlihys’ s stay relief requests ba sed on what c an only be characterized as funda mental misapplications of law and fact. The district co urt upheld that flawed court ruling, and our panel majority now erroneously affir ms. In my view, the majority’ s decision is not only inexplicable as a matter of law and f act, it is unacceptable. As explained in further detail below, the Bergrud Estate and the Herlihys are statutorily entitled to th e limited relief the y seek because “bad fait h” on the part of a de btor constitutes “cause” to lift the automatic bank ruptcy stay impose d under 1 1 U.S.C. § 362(d). See, e.g., Raleigh v. Ill. Dep’ t of Rev., 530 U.S. 15, 25 (200 0). And there is ample ev idence in this record that the Debtor D BMP and its non - debtor parent, CertainT eed, have engag ed in pervasive, well - documented, and sy stematic bad faith by subverting the Bankrup tcy Code to evade asbestos - related civil tort liability and deprive tens of t housands of dead and 1 Contrary to the panel majority’s view, such a divisional merger — effectuated pursuant to Section 1.002 (A)(55) o f the Texa s Business Organiz ations Code — is rightl y called the “Texas Two - Step.” And that term is not a pe jorative moniker used o nly by thos e seeking to assail the c orporate machinatio ns that have occurred i n the Lone Star State. Rather, it is the very ter m used by the lawyers who developed this sch eme. See, e.g., Jo nes Day, The Year in Bankruptcy: 20 23, https://www.jone sday.com/en/insights/2 024/01/the- year -in-bankruptcy- 2023 https://p erma.cc/3ER8-BKH 8 (recognizing that “[a]ls o prominent in the courts in 2023 was the pro priety of the ‘ Texas Two-Step,’ a co rporate reorganiz ation technique recent ly used by several prominent companies in combinat ion with a bankruptcy f iling to deal with mass tort liabilities”); Dan Levine & Mike Spec tor, How a bankruptcy ‘in novation’ halted thou sands of laws uits from sick plaintiffs, R EUTERS (June 23, 2022) (“ Fo ur companies, led by one lawyer, have used the ‘ Texas two -step’ to divert tens of th ousands of lawsuits into bankruptcy cour t — without filing for Chap ter 11 themselves.”).

23 dying Americans of th eir constitutiona lly - protected day in court befor e a jury of their peers. Not only that, DBMP — as the Debtor oppos ing relief from the automatic bankru ptcy stay being sought by the Be r grud Estate a nd the H erlihys under § 362(d) — has failed to carry its statutory burde n of proof on the “bad faith ” issue. See 1 1 U.S.C. § 362(g). The panel majority’ s f urther diversions from § 362’ s statutory frame work fare no better. That is, our Court’ s decisi ons in Car olin Corp. v. Miller, 886 F.2d 693 (4th Cir. 1989), and In re Robbins, 964 F.2d 342 (4t h Cir. 1992), do nothing to s alvage the majority’ s flawed view that t he Bergrud Estate and the Herlihys are not entitled to automatic stay relief. In the same vei n, my friends’ consecration of th e Debtor ’ s Ch apter 1 1 ba nkruptcy as being pursued in “good faith” — on grounds that the Debtor is seeking to “avail itself” of a so-called “§ 524(g) trust” to pay asbestos claims — makes n o sense. See ante at 6. * * * It has long been established that ban kruptcy courts are “court[s] of equity.” See N.L.R.B. v. Bildisco & Bildisco, 4 65 U.S. 513, 527 (1984). Although the Supreme Court has since then ca utioned that “whatever e quitable powers remain in the bankruptcy cou rts must and can only be exercised with in the confines of the Bankruptc y Code,” see Law v. Siegel, 571 U.S. 415, 422 (2014) — in this precise situation, § 3 62 of T itle 1 1 — th e “essence of equity” remains: that i s, bankruptcy courts have the po wer to “do equity and to mold each decree to the necessities of the p articular case,” see Hecht Co. v. Bowles, 321 U.S. 321, 329 (1944). Specifically, “bank ruptcy court[s] ha[ve] t he power to sift the circumstances surroun ding any claim to se e that injustice or unf airness is not done in

24 administration of the b ankrupt estate.” See P epper v. Litton, 308 U.S. 295, 30 8 (1939). Put simply, bankruptcy courts — as court s of equity — must do what is right, ju st, and fair. In this light, over 40 years ago, a very wise and able federal judge in Maryland, Judge Joseph H. Y oung, alerted us to the dange rs of ultra - wealthy corporations abusin g and manipulating the Bankr uptcy Code for nefario us, subversive, and inequitable purposes: This Court has watched with alarm as maj or corporations have filed for Chapter 1 1 reorganization or threatened to file Chapter 11 petitions ... to invoke the automatic stay provision to evade pending litigatio n. [T]he Court considers such practice s to be a gross abuse of the bankruptcy proceedings. Chapter 1 1 [of the Bankruptcy Code] was desi gned to give those teetering on the verge of a fatal financial plummet an opportunity to reorganize on solid ground and try again, not to give profitable enterprises an oppor tunity to evade contractual or other liability. And the purpose of the automati c stay is to preserve a debtor ’ s assets and permit an orderly, as opposed t o chaotic, distribution or reorganization. The automat ic stay was not intended to grant defendants a last-minut e escape chute out of p ending civil litigation. See Furness v. Lilienfield, 35 B.R. 1006, 1009 (D. Md. 1 983) (emphasis added). Sadly, those well - explained and justified fea rs have now come to pass, and all fundamental notions of “equity” have been tur ned on their head. I wh oleheartedly dissent. I. A. As the panel majorit y emphasizes, Certa inT eed Corporation — a highly prof itable and going business concern — has for yea rs faced “overwhelmi ng liability,” owing to i ts extensive use of asbest os in commercial products. See ante at 5 (citation modified). In that respect, the majority refer ences what it says are astrono mical numbers re vealing CertainT eed’ s liability for thousands o f civil tort claims. Id. at 4 (major ity recognizing that

25 “CertainT eed paid out less than $10 million per year in asbestos - relate d claims in the 1990s, [and] since 2002, it has spent an average of $80 millio n per year in payments to re solve such claims, as well as an additional $20 to $3 0 million per year in le gal defense costs”). Discounting the fact o f CertainT eed’ s extrem ely solid financial foo ting, however, the panel majority also admits that, “[i] n the fall of 2019, CertainT eed determined t hat it would take adv antage of the § 524(g) reorganization pr ovision of the Bankruptcy Code[.]” See ante at 5 (emphasis added). 2 An d “take advantage” CertainT eed assuredly did — through a corporate sleight -of- hand cal led the “T exas T wo - Step,” Certain T eed has been able to rid itself o f asbestos - related civil tort liabilities by creating it s corporate alter ego, DBMP. Even as the panel majorit y recounts, what happe ned in that regard is star tling: T o engage t he process, Certain T eed split itse lf into two companies under T exas corporati on law ... by for ming two new entities an d assigning to them CertainT eed’ s lia bilities and assets. One c orporation was called CertainT eed (“New CertainT eed”) a nd the other, DBM P L LC, and under the procedure, the original CertainT eed (now “O ld CertainT eed”) ceased to exist. In the divisional merger, Old CertainT eed ass igned all of its asbestos liabili ties to DBMP, as well as $25 million in cash and all the equity of a cashflow- producing siding and tr im business, Millwork & Panel, which had projected earnings before taxes of $16 million i n 2020 and an estimated fair market value of $150 mill ion. It assigned its remaining liabil ities and a ssets to the New CertainT ee d. At the same time, D BMP and New CertainT eed entered into an uncapped funding agreement that obligated New Certa inT eed to satisfy DBMP’ s a sbestos - related liabilities an d, in case of bankruptcy, to pay for all costs related to administeri ng a Chapter 1 1 reorganization, including the cost of resolving asbestos - related claims t hrough a trust under 1 1 U.S.C. § 524(g). Under this agreement, none of Old CertainT ee d’ s assets were 2 Section 524(g) of Title 11 provides for the creation of a “trust” that, pursuant to a good faith Chapter 1 1 plan of reorganiza tion, “is to as sume the liabiliti es of a debtor whic h at the time of entry of the order for rel ief has been named as a defenda nt in personal injury, wrongful death, or property - damage actions seeking recovery for damages allegedly caused by the presence of, or exposure to, asbe stos or asbestos-co ntaining products.”

26 protected from liabilit y to pay the asb estos claims, but those claims were isolated so that they co uld be managed un der a § 524(g) plan. After this division o f liabilities and as sets and the creat ion of the uncapped funding agreement, DBMP filed a Chapter 1 1 r eor ganizatio n petition to avail itself of the § 524(g) pr ocess. See ante at 5-6 (citatio n modified). In recounting these dis turbing events, my frie nds in the majority h ave overlooked important details relate d to CertainT eed ’ s execution of the “T exas T wo -Step” maneuver. Of note, CertainT e ed’ s well - crafted and met hodical plan to pursue a sham Chapt er 1 1 bankruptcy — dubbed by CertainT eed’ s law yers as “Project H orizon” — w as a “closely guarded corporate secr et . . . driven not by businesspeople, but by lawyers.” See J.A. 230- 31. 3 Indeed, “Project Horizon” was an attorney - created and implemented strategy “[t]o facilitate [CertainT eed’ s] ability to pursue a [§] 524(g) resolution” in a bankrupt cy court, “without subjecting th e entire . . . enterprise to chapter 1 1.” Id. T he “Project Horizon” plan, in turn, conte mplated DBMP filing for b ankruptcy in western N orth Carolina. Consistent therewith, in July 20 19, CertainT eed reserved the corporate n ame “DBMP, LLC” in the State of North Carolina. Later in 2019, Certain T eed underwe nt the exhaustive corporate m akeover called f or by “Project Horizon.” T o that end, on October 22, 2019, CertainT eed’ s parent — that is, a much larger international business enterprise called “Compagnie de Saint - Goba in,” based out of France — formed a company c alled “CertainT eed Holdin g Corporation” (“CT Holding”), and thereupon contributed all issued 3 Citations herein to “J.A. ___” refer to the contents of the Joint Appendix filed by the parties in this appea l.

27 and outstanding stock of CertainT eed to the newly-forme d “CT Holding,” in exchange for full ownership of CT Holding. That very same day, October 22, 2019, Certain T eed also transitioned from a Del aware corporation to th at of a Delaware limi ted liability company. The next day, Oct ober 23, 2019, at 9:00 a.m. CST, CertainT eed c onverted itself to a T exas limited liability company. A pproximately 30 minutes later, Cert ainT eed effectuated its “T exas T wo - Step.” That is, CertainT eed split itself into two T exas limited li a bility companies: “New Ce rtainT eed ” and the Debt or here, “DBMP.” 4 Subsequently, at 10:00 a.m. CST on October 23, CertainT e ed — now free of its asbestos - related civil tort liabilitie s — converted back t o a Delaware limited lia bility compan y. And the n at 12:49 p.m. CST, DBMP converted to a North Carolina limited liability company. All told, the so - called “New” CertainT e ed and DBMP were T exas corporate enti ties for less than four hours. As a result of Certain T eed’ s “ T exas T w o - Step,” the DBMP was “a mirror image” of the “Old” Certain T eed: “ a fully operatin g company with all of Old Certa inT eed’ s employees, the bulk of its asse ts and operation s, and all of i ts non - asbestos cre ditors.” See J.A. 219. But DB MP was also “quit e dif fer ent,” having been “all ocated 100% of ... CertainT eed’ s ... as bestos liabilities.” Id. at 219, 234, 238. As the diagram below dep icts: 4 The corporate moniker of “New CertainTeed” is a complete misnomer. The only thing that is truly “new” about Cer tainTeed — following its effect uation of the “Texas Two- Step” in 2019 — was that it had rid itself of it s existing asbe stos - related civil tort liabilities. Accordingl y, while the bankruptc y court, district court, and now the p anel majority refer to Cer tainTeed as “Ne w Certa inTeed,” I properly re fer to that entity a s “CertainTeed.”

28 Id. at 236. 5 As my friends in th e majority acknowled ge, CertainT ee d and DBMP also executed a series of so - called “funding agreements” around th at time. See ante at 5- 6. Those agreements provided, inter alia, that Certai nT eed would sup ply DBMP with all fun ds necessary to satisfy its asbestos civi l tort liabilities, irrespective of wh ether DBMP was in or out of bankruptc y. Furthermor e, the agreements did not call for any “loans” t o DBMP from CertainT eed, th ey do not impose any repayment obligations on DBMP, and the amount of the payment s by CertainT ee d to DBMP are not monetar ily “capped.” 5 This diagra m was utili zed by the bankru ptcy court in thes e proceedings to “depict, in condensed form, the organizationa l structure before and after” CertainTeed’s Texas Two- Step maneuver in October 2019. See J.A. 236. Although com plicated at first blush, the diagram reflects that, following its Texas Two-Step, Certa inTeed’s corporate structure remained largely intact — that is, the company was still a subsidiary of the French -base d “Compagnie de Sain t -Gobain, ” and it yet po ssessed 97% of CertainTeed’s viable assets and operating liabilities. Notably, the p rimary difference was that CertainTeed’s “bad” liabilities — i.e., its entirely manageable asbestos l iabilities — were now confined to DBMP, who would soo n be the Debtor in this Chapter 11 bankruptcy.

29 Furthermore, in light of the circular “fundin g agreements,” the Debtor DBMP and CertainT eed have “st eadfastly” maintained thr oughout these Chapter 1 1 proceeding s that the Debtor “has the same ability to fund the costs of defending and resolving present and future asbestos claims, both in the state and federal courts and in c onnection with any chapter 1 1 filing.” See J.A. 237 - 38. And the agreem ents otherwise “make[] available [CertainT eed’ s] and DBMP’ s co mbined resources from [pre - divisional merger CertainT eed] — giving DBMP t he ability to me et its obligations, inc luding paying as bestos claims.” Id. at 1068 (citation modified). Put differently, the agreements between CertainT eed and the D ebtor are much li ke an A TM that t he Debtor c an access at any time to satisfy all of its supp osedly “overwhelming ” asbestos-related civil tort liabilities. B. 1. Shortly after being formed out of “whole clot h,” 6 DBMP filed its voluntary petition for bankruptcy in the W estern D istrict of North Carolina i n January 2020, purporting to do so under Chapter 1 1 of the Bankrup tcy Code. The Debtor DBMP’ s bankruptcy filin g triggered an application of the automatic stay under 11 U.S.C. § 362(a). Around that time, the Debtor ’ s ul timate parent — Saint-Gobain — announced to inves tors that it expected the bankruptcy would “take up to approximat ely five to eight years, ” would provide the Debtor “with the time and protection to negot iate an agreement to be approved o n behalf 6 When something is formed out of “wh ole cloth,” it is simply made up. See, e.g., William Safire, On Language; Out of t he Whole Cloth, N.Y. T IMES M AG. (July 19, 1998), https://www.nytimes.c om/1998/07/19/magazi ne/on-language-out- of-the-whole- cloth.html [https://per ma.cc/AN7V-M6Y7].

30 of all claimants and b y the court,” and woul d result in “all asbesto s litigations [being] stayed and all related costs suspende d.” See J.A. 437. And Saint - G obain related that the bankruptcy was impera tive due to “increasing risks . . . in the US tort system.” Id. In 2021, the bankruptcy court grante d the Debtor DBM P’ s moti on to preliminarily enjoin all litigation against Certain T eed, there by extending to that fully - solvent en tity — which, under “Projec t Horizon,” purposefully did not file for Chapter 1 1 bankrup tcy — the immense protections of the automatic bankr uptcy stay. The co urt reasoned that allowing continued civil asbesto s litigation and collection against Ce rtainT eed would be tantamount to a dismissal of the Debtor ’ s bankruptcy. The court explained, however, that despite enjoining those tens of thousands of as bestos - related lawsuits, i t was not ruling on a ny issue of “bad faith,” nor on a motion to di smiss the Debtor ’ s ban kruptcy. See J.A. 260. Of especial relevance here, in af fording pre liminary inju nctive relief to the non - debtor CertainT eed, the bankrupt cy court made a serie s of factual findings regarding CertainT eed’ s conduct in undertakin g the “T exas T wo - Step” to only then plunder the Debtor DBMP — fully loaded with Certa inT eed’ s existing as bestos - related liabilities, bu t nevertheless backed by the limitless “funding agreements” — into bankruptcy: • CertainT eed w as “[s]eeking a less expensive way of dealing w ith these tort liabilities” from cla ims filed by asbestos pl aintiffs; • The Debtor DBMP’ s C hapter 1 1 bankruptcy was a long - for mulated plan that started in Februar y 2018, was code - named “Project Hori zon” and was “an attorney - created and i mplemented strategy ‘[t]o facili tate [CertainT eed’ s] ab ility to pursue a § 524(g) resolution’ in bankru ptcy ‘without subjecting the entire . . . enterprise to [C]hapter 1 1’”; • “CertainT eed ne ver entertained a bankrupt cy filing for itself and all of its subsidiaries and a f filiates . . . . This was a profitable going concer n whose

31 assets significantly ou tweighed its combine d operating and asbes tos liabilities. For such an enterprise, a ban kruptcy filing would have seri ous negative consequences ”; and • “Rather[] than file .. . Certa inT e ed or the CertainT eed Enterprise in bankruptcy, the Project Horizon pla n was to isolate the asbest os liabilities in a single affiliated corporation and file it in [C]hapter 1 1.” See J.A. 229-32. 2. In April 2024, the Bergrud Estate and the Herlihys sought relief in th e bankruptcy court from the automatic stay, pursuant to 1 1 U.S.C. § 362(d). 7 Predicated on allegations of the Debtor DBM P’ s “bad faith” underlying the filing of its Ch apter 1 1 petition, the Bergrud Estate and the Herlihys pursued circumscribed rel ief from the automatic stay, seeking only to qu antify their state - la w civil to rt claims against th e Debtor and Certa inT eed before juries of their peers in California and W ashington. Notably, to this very day, the Bergrud Estate and the Herlihys are the only cr editors in thes e bankruptcy proc eedings that have sought such § 362 (d) relief from the au tomatic stay from the bankruptcy court. Therein, the Bergrud Estate and the Herlihys maintained that the De btor DBMP is not — an d never has been — in financ ial distress. Indeed, the Debtor has admitte d, throughout these proce edings, that it is able to pay all asbest os creditors in full outside of bankruptcy. The Bergrud Estate a nd the Herlihys asserte d that the “T exas T wo -Ste p” — 7 Section 362 (d) of Title 11 pro vides, in relev ant part, that “[o]n req uest of a party in interest and after not ice and a hearing, the c ourt shall grant relief from the stay provid ed under subsection (a) o f this section, such as by terminating, annul ling, modifying, or conditioning such stay. . . (1) for cause, incl uding the lack of adequate protectio n of an interest in property of s uch party in interest [.] ” See 11 U.S.C. § 362 (d) (emphasis added).

32 which strands a single class of creditors (i.e., civil tort plaintiffs) to pursue their clai ms in bankruptcy, ye t shields all other creditors and 97% of CertainT eed’ s profitable business operations from the o bligations of a bankruptcy — confirmed that the Debtor was using Chapter 1 1 as an improper litigation tactic to impede state - law asbest os liability trials for more than 60,000 plaintiffs that DBMP was ful ly able to pay vis -à- vis the endless “funding agreements” backe d by CertainT eed. The Bergrud Estate and the Herlihys thus ma intained that the Debtor ’ s bankr uptcy does not serve the Bankruptcy C ode’ s purpose of resusc itating a financially distressed entity, and wa s thus undertaken in “bad faith,” justifying an award by the bankruptcy cour t of what is called “f or cause” relief from the bankruptcy stay. C. 1. In May 2024, the ban kruptcy court — ruling from the bench — denied the strikingly limited stay relief soug ht by the Bergrud Estate and the Herli hys. The court primarily based its ruling on two of our Court’ s decisions — Car olin Co rp. v. Mil ler, 886 F.2d 693 (4 th Cir. 1989) (specifying that “both objective futility and subjective bad faith be shown in order to warrant dismissal[] for want of good faith i n filing” under 1 1 U.S.C. § 1 1 12), and I n re Robbins, 964 F.3d 3 42, 345 (4th Cir. 1992) (recognizing, in context of good -fai th bankruptcy, thre e factors that must be established to demonst rate statutory “cause” for lifting automatic bankruptcy stay). Against th at backdrop, the court explained as foll ows: 8 8 My settled preference — as a matt er of legal writing that makes a ny sense — has been to avoid the use of lengthy “bloc k quotations” in opinions. In thi s situation, however, (Continued)

33 [T]he first order of bus iness is what to do with the Bergrud and Herlihys’[s] motions for relief from stay. So I gue ss I get to start out by boring y ou with long talk, but here’ s where we are. Both have relief f rom stay motions. It probably won’t surprise anyone that I think that the motions have to be denied for the reason that we'v e had substantially identical requests for rel ief that I think have been ent ertained at least four times betwee n the three so - called “t wo - step” cases in this District and on each occasion t he motions were denie d. Back at the outset of this case we ha d a motion by the [Committee of Asbestos Claimants] for relief from stay and in conjunction with the preliminary injunction and on A ugust the 12th I enter ed Findings and Conclusions at that ti me that did a number of things, but effectively, with regard to the relief fr om stay, den ied the request. The [Committee] t hen was seeking relief to per mit all 60,000 plus claiman ts, or however many th ere are, to individually liquida te their tort claims, bo th against the Debtor and as against the new compa ny, New Ce rtainT eed, i n the tort system. My ruling then was pre mised on three or four different points. First, th at there wasn’t cause to, to grant relief fr om stay because it w ould greatly pr ejudice the estate and the harm to the Debtor and its estate would o utweigh any hardship occasioned t o the asbestos claimants, which was almost e ntirely delay harm; that causi ng the tort system to b e flooded with asbesto s cases, even as the chapter 1 1 case remained pen ding wouldn’t serve judicial economy and in fact, t hat the asbestos claims arose under state law didn’t support relief from stay because it involved ind ividual claimants ge tting their claims determined in state court as opposed to in the bankruptcy case; that it also would imperil the ability for the Court to treat consistent ly and fairly all sim ilarly situated clai mants in a 5 24(g) plan, p articularly those that are future claimants; and that to grant relief from s tay would, would effectively destroy the bankruptcy case. There would be no chance of a suc cessful reorganization. It would be, effectively, tan tamount to dismissal of the chapter 1 1 case and without meeting the stan dards for a bad faith dismissal under the Car olin case. I noted then that delay itself is n ot generally considered to be a reason to grant relief from stay because it takes tim e to work through the bank ruptcy process and get a, a confirmed plan and t hat if there was dela y, that a detailed recounting of the bankruptc y court’s May 2024 bench rul ing is warranted, in order to accurately dep ict the specified “bases ” of the court’s challen ged reasoning.

34 bankruptcy was not the only forum that pre sented a prospect, that effectively the state court system with so many cases that were filed more than ten years ago also involves dela y, given the number of these claims, but that, on the other hand, if there was good faith and cooperation, that the pa rties might actually be faster in bankruptcy by, by agreei ng on a number and treatment under a trust and plan. Back then, the [Committee of Asbestos Claimants], and no w the movants, decried the T exas two[- ]step and the follow - on bankrupt cy as being, per se, a fraud perpetrated by the Debtor ’ s predecessors against the asbesto s claimants. Of course, the Debtor and those all ied with the Debtor deny this. They say they’re in ba nkruptcy just to access the trust mechanisms offered under 524(g) and those are only available in chapter 11 and they also say they plan to pay every meritorious claim, th at effectively, they believe this would be fairer and more efficient because they wo uldn’t b e paying bogus claims because it’ s too exp ensive to try the cases t o verdict. Back then when we were talking abo ut this, the [Committee of As bestos Claimants] wanted to allow the claima nts to attack [Certain T eed] as well. That was problematic f or a variety of reasons, not just the interfe rence with the reorganization, but also legally because t he individual claimant s were then talking about pur suing for their individua l benefit claims that we would consider in the Fourth Circuit first cr ack avoidance claims and that would interfere with the bank ruptcy resolution of th ose claims. Now I don’t see that in the present motion, but I wasn’t entirely clear whether that wa s in the back of someone’ s mind. But for whatever reas on, I have sinc e recognized there is, in fact, an estate claim there. There’ s a right for creditor s to challenge the divisional merger and with the Debtor i n bankruptcy, under Circuit precedent thos e estate claims had to be prosecuted by the estate and I’ ve since allo wed the [Committee] to assert a nd they have asserted t hose claims. So grantin g relief from stay on a wholesa le basis would undermi ne the effort. So that was the reason the [Committee’ s] motion was denied.. . . But here we are again. Rounds 2 and 3 in the DBMP cas e with the same firm pressing the same rejected relief and theorie s and it will not surprise you that I’m denying the motion s again. I’d say nothing really has chan ged since my first ruling in this case with, on the [Comm ittee of Asbestos Claimants’] motion. It looks like maybe trying out the ne w relief from stay arguments on

35 a different judge . . . I believe un der Car olin if we’re g oing to start g ranting relief from stay en m asse, then you’re back under Car olin and we c an’t on the basis of subjective bad faith, if that exists, warrant, effectively, tu bing the whole case. That’ s to do, ef fecti vely, indirect ly what I am not permitted to do directly. Now the movants have suggested t hat thinking that there’ s an avalanche of motions coming is s peculative, b ut I would dis agree with all that. I disagreed before. I’ve presided over now, I thi nk, a half dozen or maybe eight a sbestos cases and been doing th is for a dec ade and while I don’t know as much as all of you about those cases, I would say that from what I’ve experienc ed it is an absolute certainty that to grant these two motions would lead to hu ndreds, if not thousands, [or] m ore. As we all know, there a re thousands and thous ands of claimants, but most of them are represe nted by a doze n or so asbestos firms across the country, firms that are knowledgeab le about bank ruptcy la w, well info rmed about what’ s going on in each of thes e cases, many serving o n the [Committee of Asbestos Claimants] indirectly, and are creditor firms that are aggress ive in representing their clients and protecting th eir rights. The firms have heavy influence over voting. Just witness the G arlock and K aiser case. The claimants were all opp osed to the Debtors’ p roposal, but when a d eal was struck with the [Committee] in, in those ca ses the result became a, almost a hundred- percent vote i n favor. And all of that experience tells me that if I were to grant these two motions for relief from stay, even just to liquid ate the claims, by month's end I’d have dozens of claimants maki ng the motions and by the end of the summ er there’d be tens of th ousands. So my prior ruling and reasoning in the [Com mittee of Asbestos Cla imants] relief from stay matter and the dis missal matters, especial ly the denial of dismissal, I’m readopti ng here today.. . . I do want to say a cou ple words about s pecific arguments that were raised just for the benefit of a reviewing court, if there is one. The movants are saying that the t wo[- ]step in bankru ptcy were ... undertaken in sub jective bad faith. I don’t feel comfortable making that conclusion today, not on this record or at this stage i n the case. That same basic argument was made in the manufacturing jurisdi ction and [preliminary injunctio n] arguments in Bestwall, and, as you know, the District Court and then the Fourth Circuit effectively rejected those. The Panel even scolded the claimants for delaying the bankruptcy case and the Fourth Circu it didn’t overturn their ruling. And

36 since then. Judge Bey er and I both have enc ouraged direct appea ls of our dismissal rulings to the Circuit, but twice thos e have been denied. It is obvious that the [Committee of Asbest os Claimants] thinks t hat if a profitable conglomerat e breaks off part of itse lf to use chapter 1 1, tha t’ s, per se, bad faith and that the filing, a filing to overcome th e tort system is a fraud, but the Debtors t hink just the opp osite, that this is an ef ficient w ay of dealing with an intractable pr oblem. And by the way, they owe les s than what the claimants think and t hey think they’ve been abused b y bogus claim s in the tort system. The Debtors also maintain they intend to pay all allowe d claims. They just don’t think they owe as many of t hem. So they, from their van tage point, say they’ re not just stran ding the asbestos claims. And it’ s, of cour se, true that they’d like a capped plan. Every asbestos debtor to date prac tically has and they’d li ke to avoid punitive damage awards, etc., etc., an d they’d like to protect their af filiate s. But there’ s nothing new about any of that. Are those aspiratio ns, per se, bad faith? It seems to me that right now the Fourt h Circuit doesn’t seem to, nor does our Di strict Court. I’ve mentioned the di fferences of opinion about whet her a non -dist ressed solvent company can use ban kruptcy tools. In the Aldrich order denying dismissal, I gave you my take about where I see the landscape and the potential issues lying a head. No change th ere today because a hig her court than this one will ultimately make the call. But can I find today that this filing is subjective bad faith because it’ s sought by a solvent no n -distressed entity and does that dismiss, justif y dismissal? I’d say the answer in this Circuit at the moment a ppears to be no. And moreover, we are currently li tigating the pro priety of the, of the divisional merger and the bankruptc y filing in the adversary proceedi ngs and whether those events were detrimental to creditors. And t hat also cautions against trying to determine the sa me matters, like subjective bad faith in this current motion. But ev en if subjective bad fa ith lies, I don’t think i t’ s the standard. At most, it’ s a factor. The standard for relief from st ay is cause and the controlling case in our Circ uit is R obbins. Robbins involves a balancing test and ... here relie f from stay woul d lead to case di smissal, whic h under Car olin is not attainabl e for simply subjective bad faith. So I’m not going to try to do indirectl y something that I’m not perm itted to do or not inclined to do under existi ng law. I am bound by the Car olin decision.

37 Now movants seem to think the Court invited this motion. I didn’t. I try to listen to the issues that y’all present and consi der the evidence and m ake the findings from, that support the decisions and answer the q uestions fairly. On occasion, I have been known to talk a little longer than shorter beca use I think in some ways it helps you on trying to under stand how your jury is seeing the case as it goes alon g and maybe helps you on settlement grounds. But bottom line is the Court’ s not on anybody ’ s side. I’m not an activ ist and I’m not trying to engineer any particular result. On the facts found in the PI ruling, I held that the bankruptcy stay applied, that dismis sal wasn’t permitted, and the thir d -par ty injunction w as required. That’ s a preli minary ruling, but that’ s what I thought and that h asn’ t changed today. There were some m ore arguments that w ere just rehashes of arguments previously made and rejected in the [pre liminary injunctio n] and the [Committee of As bestos Claimants] relief fro m stay motions as well as in the two cases, like arguing that Pr e mier is the st andard, not Car olin. I’m not going to go back t hrough all of that, again. But I would say t his. W e’ve been through this at l east four times. Repeating this exercise for di f ferent claimants with the sam e identical legal posture is a waste of every o ne’ s time. It’ s not very likel y to work and your vexatio n of not being able to g et to the Circuit or getting a ruling that you like doesn’t justify increasi ng your opponent’ s costs a nd everyone’ s workload. So ... I would suggest not continuing to try to beat your head against a rock. That’ s not going to change the outcome, bu t it could end up with you being sanctioned for press ing the same rejected the ories time an d again. So we’ve got enough problems to deal with and I’m jus t going to leave that as a word to the wise, recognizin g that my time here is s hort. So bottom line is the motions are denied. I would call upon the op ponents, the Debtors primarily, t o draw a short order th at just makes reference to the verbal findings and c onclusions and run it by everyon e else for c omments and send it on down. See J.A. 913-25. As a threshold matter, astonishingly absent fro m the bankruptcy court’ s bench ruling denying relief from the automatic stay wa s any consideration or disc ussion of the adverse impacts thereof on the Bergrud Estate or the Herlihys. An d that ruling was bein g made by

38 a bankruptcy court of the United States — whic h had been created to be a “court of equity.” See, e.g., N.L.R.B. v. Bildisco & Bildisco, 46 5 U.S. 513, 527 (1984). Rather, a major part of the court’ s decision denying relief from the stay was an imp licit but clear threat — set forth in the penultima te paragraph of the a bove quotation — dir ected to the lawyers representing the Bergrud Estate and the Herlih ys. Those lawyers were advised by th e court that they might be “sa nctioned for press ing the same rejected t heories time a nd again ... and I’m just going to le ave that as a word to th e wise[.]” See J.A. 924 -25. 9 Distilled to its core on the merits, the bankrup tcy court in its bench ruling declined to directly resolve the issue concerning the Debtor DB MP’ s “bad faith” in t he context of the stay relief sought b y the Bergrud Estate and the Herlihys. I nstead, the court stated t hat such a ruling wo uld allow “unf ettered litigatio n” and “collec tion” against Cer tainT eed, and 9 For the record, the motions being addressed by the bankruptcy co urt were the first and only such motions pursued by the lawyers for the Bergrud Estate and the Herlihys in this case. And those lawyers, as we all well know, were obliged to r epresent their clients vigorously, and to the very best of their ability. We always respect the work of such court officers, and those indi viduals were entitled t o believe that their clie nts were best served by the relief being sought. T hat they might be sanctioned by a ba nkruptcy court of the United States for being zealous advo cates was an u nwarranted and re grettable threat, and it is also contrary to the Rules of Professional Conduct that gover n our profession: A lawyer should pursue a matter on behalf of a client despite opposition, obstruction or perso nal inconv enience. .. a nd take whatever la wful and ethical measures are re quired to vindicate a client ’s cause or endeav or. A lawyer must also act with commitm ent and dedication to the interests of the client and with zeal in advocacy upon the clie nt’s behalf. See Model Rules of Professional Co nduct, Rule 1.3[1]. Otherwise, the stay relief reques t presented here by the lawyers for the Bergrud Estate and t he Herlihys was simple — authorize our dead and dying clients t o exercise their ri ght to sue the Debtor, Certai nTee d, and its affiliates for civ il torts in the Washingt on and California state courts.

39 would be the “fun ctional equivalent” of a di smissal of the ba nkruptcy under 1 1 U.S.C. § 1 1 12. See J.A. 921 (bankruptcy court statin g that it “[didn’t] feel comfortable making that conclusion today,” regarding iss ue of Debtor ’ s “bad faith”). W it hout explaining how a quantification of the Bergrud Estate’ s an d the Herlihys’ s asbestos t ort claims — and th en authorizing their retur n to th e bankruptcy cour t — would equate to s uch a “dismissal” of the Debtor ’ s bankruptcy, the co urt simply speculated. It surmised that (1) lifting the automatic bankr uptcy stay for the Bergrud Estate and the Herlihys w ould result in hundreds or thousands of additio nal similar motions; (2) that the court would be required to grant al l of those hundreds or thousands of motions; an d (3) that suc h an outco me would “defeat the purpose of the bankrup tcy case, and . . . be aki n to dismissal.” I d. at 918. 2. The Bergrud Estate and the Herlihys then appealed the bankruptc y court’ s stay denial ruling to the district court. In Oct ober 2024, the district court affirmed the bankruptcy court. In the district court’ s view, the bankruptcy cou rt did not “abuse its discretion under Robb ins.” See J.A. 1 196. Al though recognizing t hat “bad faith” in filing a bankruptcy proceedi ng is a valid gr ound for lifting an automatic s tay, the district court failed to address whether the Debtor DBMP h ad filed its Chapt er 1 1 petition in bad faith. Nor did the court e xplain how the automat ic stay relief sought by the Bergrud Estate and the Herlihys (i.e., limit ed relief from stay to quantify, bu t not collect, on their ci vil tort claims) would be an “e f fective dis missal” of the Debtor ’ s Chapter 1 1 bankruptcy.

40 D. The impact of these highly su spect corporate maneuverings by CertainT eed — an enormously profitable business enterprise, acting at the behest of its French parent corporation, Saint -Gobain — and the Debtor D BMP cannot b e overstated. And put simp ly, that impact was and is devastating. As th e panel majority ackno wledges: As the result of th e Chapter 1 1 bankru ptcy filing, all asbestos - related state law tort claims agains t DBMP were automa tically stayed pursuant to 1 1 U.S.C. § 362(a), a nd the bankruptcy c ourt, in addition, entered a preli minary injunction that prohibited claimants from bri nging asbestos claims a gainst New CertainT ee d, af fili ated entities, and Old C ertainT eed’ s dist ributors. See ante at 6 - 7. Specifically, approxim ately 60,000 a sbestos - related civil tort lawsuits — 32,000 being actively litigated in our Nation’ s courts — are no w stayed by the Debtor DBMP’ s sham C hapter 1 1 bankruptcy in the W estern District of North Carolina. In other words, tens of thousands of pe nding civil tort suits in state and federal courts across our Country — initiated by plain tif fs who are suffering and dying from mesothelioma and othe r diseases caused by asbestos - riddled pr oducts of CertainT ee d — ar e at a screeching halt. And that is so because a financi ally healthy and fully solvent corporation (i.e., Certai nT eed) has now been authorized by three fede ral courts to place its asbestos- related civil t ort claims involving th ose thousands of American worker s behind the Bankruptcy Code’ s firewall of protection. Furthermore, despite e njoying the immense

41 benefits of the Debtor DBMP’ s bankruptcy fil ing, CertainT eed is not under goin g any of the scrutiny, tra nsparency, and risk that a Cha pter 1 1 bankruptcy sho uld entail. 10 The panel majority s pills much ink discussing the “impa cts” on Certai nT eed and t he Debtor DBMP. But what about the Amer ican workers suffering from the scourge of deadly diseases that were caus ed by their exposure to Certain T eed’ s asbestos - riddled products, and who otherwise simply want their day in court? Like the bankruptc y court, the majori ty has not even discussed thos e harrowing equitable a spects of these proce edings. Of relevance to this appeal, claimant an d movant Peter Bergrud — a m ilitary veteran who served our Country in the Air Force — be gan a decades - long career in the construction industry in the State of W ashington i n the 1960s. T o that end, Mr. Bergrud routinely cut, 10 Becaus e of the foreg oing facts, the Debtor DB MP’s Chapter 11 bankruptcy s hould never qualify as a “ban kruptcy,” under a f aithful application of Article I of the Constit ution. See, e.g., Bestwall LLC v. Off. Comm. of Asbestos Claimants o f Bestwall, LLC, 148 F.4th 233, 246 -59 (4th Cir. 2 025) (King, J., dissenting). As explai ned therein, the recent string of Texas Two - Step ban kruptcies in our Circuit — specifically, in western North Car olina — is “a far cry from the bankrup tcy system that the Fo unders envisioned w hen they constitutionally autho rized Congress to create ‘ unif orm Laws on the s ubject of Bankruptcies. ’” Id. at 247 (quoting U.S. Con st. art. I, § 8, cl. 4). Rather, “[a]t the time of the Founding [in 1789], the protecti ons of bankruptcy were available only to debtors who were truly bankrupt — that is, those unable or unwilling to pay their d ebts. ” Id. As a result of those historical facts and the tra dition of the term “ban kruptcies,” “nothing in th e Constitution permits C ongress, or the federal courts, to allow a bank ruptcy to be wielde d as a strategic weapon b y the powerful to a void accountability to t he harmed[.]” Id. Regrettably, our en banc Court recently deni ed the validity of my above -recited view. See Bestwall LL C v. Off. Comm. of Asbestos Claimants of Bestwall, LL C, 157 F.4th 579 (4th Cir. 2025). As a result, the preceden t in this Circuit pr ecludes our determin ation that DBMP’s Chapter 1 1 bankruptcy is unconstitutional und er Article I of the Constitution. See, e.g., M cMellon v. United Sta tes, 387 F.3d 329, 334 (4th Cir. 2004) (en banc). Perhaps the Supreme Court will consider the matter an d end such deceptive “ bankruptcies.”

42 beveled, and drilled CertainT eed’ s asbest os - cement pipe. Many year s later, in 2019, M r. Bergrud was diagnosed with — and then died from — his af fliction b y mesothelioma. A post- mortem examina tion revealed asbestos in Mr. Bergrud’ s lung tissue. Shortly after his death, Mr. Bergrud’ s Estate sued CertainT eed in a W as hington state court in Apr il 2019. Meanwhile, claimant and movant Mi chael Herlihy worked f or a California saw sharpening company f rom the mid - 1980s un til the mid - 1990s. One of his employer ’ s primary customers was the Certain T eed plant in Riverside, where CertainT eed manufactured its asbes tos- cement pipe fro m 1965 through the early 1990s. Much like the late Mr. Bergrud, Mr. Herlihy regular ly breathed “dust cake” from the saw blades used to cut asbestos - cement pi pe at CertainT ee d’ s Ri verside facility. In March 2023, Mr. Herlihy was diagnosed with me sothelioma. Mr. Herlihy — who is yet living and suffering — and his wife, Mrs. An n Herlihy, sued CertainT eed in a California state co urt in Aug ust 2023. Beyond Mr. Be r grud and Mr. Herlihy, tens of thousands of other victims o f CertainT eed asbesto s are suf fering the sam e debilitating fate. They are dying of mesothelioma — a rare and incurable cancer caused almost exclusively by asbestos exposure — and other diseases, but th eir civil lawsuits have been plac ed on ice nationwide by bankruptcy proceedings in North Carolina. And it is those dy ing and suffering victims — not the corporate lenders or inst itutional creditors of a normal bankrupt corpora te entity — who constitute 97% of the creditors in the Debtor DBMP’ s Chapter 1 1 bankruptcy. They “are ... ordinary and hardworking American s who have spent their workdays installing drywall, laying insulation, cutting pipe, and t hen simply returning to their homes.” See Bestwall LLC v. Off. Comm. of Asbestos Claimants of B estwall, LLC, 157 F.4th 5 79, 581

43 (4th Cir. 2025) (King, J., dissent ing from deni al of rehearing en ban c). Moreover, “[t] hey are factory workers, veterans, tradesp eople, and laborers,” and “[t]hey are also the widows, adult children, and fa mily members of tho usands of [Certain T ee d’ s] and [DBMP’ s] deceased victims, see king to pursu e tort claim s in the civil courts on behalf of their lo ved ones who have died or are suffering from harrowing asbe stos-related diseases.” I d. II. Against this compell ing backdrop, m y friends in the majority errone ously rule that the bankruptcy court properly denied the re quests of the Bergrud Estate and the Herlihys for relief from the automatic stay. In so doi ng, the majority has recited what it says are issues not “before us” in this appeal: (1) “any motion to dismiss th e Chapter 1 1 petition so as to challenge whether Chapter 1 1’ s § 524(g) reorganization procedure has been appropriately invoked in this case”; (2) “the q uestion [of] ... whether the pre -bankruptc y Te x a s Tw o - Step process is appropriate or legal”; or (3) “the more fun damental question of whether Congress had constitutional authori ty to enact § 524(g) without requiring a showing of ‘insolvency.’” See ante at 10. Rather, the majority pr oclaims that, “in this pr esumptively viabl e Chapter 1 1 proceedin g, we address only t he standard for lifting a § 362(a) stay and whet her the district court co rrectly applied that stan dard.” Id. By those limitations, ho wever, my friends have avoided addre ssing their stated issue “head on.” Although they recognize that 1 1 U.S.C. § 362(d) supplies the stand ard for assessing whether relief from the automatic st ay is warranted, the majority did not a pply that simple framework here. Instead, invok ing our Court’ s in apposite decision in In r e

44 Robbins, 964 F. 2d 342 (4th Cir. 1992), the majority erroneou sly proclaims t hat affording the Bergrud Estate and the Herlihys limite d § 362(d) relief from the automatic ba nkruptcy stay was not appropriate because doing so wo uld “greatly prejudice” the Debtor DBMP’ s bankruptcy “goals,” and that “such har m would outweigh an y harm to the Claimants that might be caused by any delay in the resolution of their asbestos cla ims.” See ante at 12. From there, and to further distract fro m § 362(d)’ s plain text, the majority turns to our 1989 decision in Car olin Co rp. v. Mille r, 886 F.2 d 693 (4th Cir. 1989) — another wholly inapplicable pr ecedent — for the proposition that the Bankruptcy Code must be considered in some “larger context.” See ante at 14. Th e majority then concludes that, because the Debtor DBMP invoked 1 1 U. S.C. § 524(g) — a tool that allows debtor s facing overwhelming asbestos - related tort liabilities to form a trust to pay multiple c laims — its Chapter 1 1 petition must be “ pr esumptive ly viable,” id. at 10, such that no further inquiry into the Debtor ’ s “ bad faith” in filing a Ch apter 1 1 bankruptcy pet ition is warranted. III. In these circumstances, I disagree with the ma jority’ s affirmance of t he bankruptcy court’ s erroneous de cision. And that is s o for at least three sound reasons. 11 11 The panel majority has not artic ulated the standard of review tha t guides its analysis. That notwithstanding, our C ourt has recognized that “[a] decision to lift the automatic stay under s ection 362 of the [Ban kruptcy] Code is withi n the discretion of th e bankruptcy judge” and “may be overturned on appeal only for abuse of discretion.” See Robbins, 964 F.2d at 34 5. Of course, an error o f law is an abuse of discretion that warrants reversal. See Wudi Indus. (Shan ghai) Co., Ltd. v. Wong, 70 F.4th 183, 190 (4 th Cir. 2023).

45 First, the majority ign ores the plain statutor y text of 1 1 U.S.C. § 362(d), which supplies the appropriat e — and only — framework for asse ssing whether relief from the bankruptcy court’ s aut omatic stay is warranted. And applyin g that framework here, the Bergrud Estate and the Herlihys a re entitled to relief fro m the stay because: (1) bad faith (or, a lack of “g ood faith”) is “cause” f or obtaining relief from the automatic stay, see Raleigh v. Ill. Dep’ t of Rev., 53 0 U.S. 15, 2 5 (2000); (2) a bankruptc y petition is file d in “bad faith” when it does not further “th e purposes o f the [Bankrupt cy] Code,” which are primarily to “[r]esusitat [e] a financially trouble d debtor,” see Bartenwerfer v. Buckl ey, 598 U.S. 69, 72 (2023); and (3) the Debtor DBM P’ s bankruptcy is being p ursued in “bad faith” because it does not further any purpose of the Code. Otherwise, th e Debtor DBMP has failed to meet its § 362(g) burden of d isproving bad faith — i. e., by establishing that there is “good cause” for the automatic stay imposed on the Bergrud Estate and the Herlihys. Second, the panel majority is wro ng to affirm on the ground tha t the bankruptcy court correctly applied In r e Robbins, 96 4 F.2d 342 (4th Cir. 1992). T o be sure, Rob bins merely articulates the test for ascertainin g what constitutes t he statutory “cause” in the context of a good fa ith bankruptcy — i.e., when a debtor has not manipulated an d exploited the Bankruptcy Code for nefarious subversive purpos es — for lifting an aut omatic bankruptcy stay, pursuant to 1 1 U.S.C. § 362(d). But even applying Robbins, the Bergrud Estate and the Herlihys are yet entitled to relie f from the automatic ba nkruptcy stay. Third, the majority’ s effort to distort the realit y of this case by way of our Car olin precedent and 1 1 U.S.C. § 524(g) i s as circular as it is illogical. It makes no sense to conclude that the Debtor has been acting within the contours of a legitimate Chap ter 1 1

46 bankruptcy — because it is seeking a “reorganization” to establ ish a § 524(g) trust — without first addressin g the “bad faith” that already infec ts its Ch apter 1 1 ban kruptcy petition. Again, the majority overlook s the issue of “bad faith” by b urying its head in the sand and ruling that the Debtor ’ s invocation of § 524(g) — a tool for debtors in Chapter 1 1, rather than an unde rlying purpose for purs uing bankruptcy — can save the day. A. 1. Starting off, th e panel majority’ s decision c onstitutes a novel and provocative departure from the plai n text of the Bankruptc y Code provision that governs an assessm ent of whether relief fro m the automatic bankruptcy stay is warranted. That provision unambiguously provid es that relief from the a utomatic stay must be afforded “for cause”: [o]n request of a party in i nterest and after notice an d a hearing, t he court shall grant relief from the stay provided under subsection (a) of this section, such as by terminating, annulling, mo difying, or conditioning such st ay . . . (1) for cause, including the lack of adequate protection of an interest in property of such party i n interest[.] See 1 1 U.S.C. § 3 62(d) (emphasis added). Se parately, and of great i mportance here, “[i]n any hearing under su bsection (d) ... of this se ction concerning relief from the stay of any act under subsection (a) of this section . . . (2) the party opposing such relief has the bur den of pr oof on all other issues.” Id. § 362(g)(2) (emphasis added). As such, DBMP, as the non- moving Debtor, was obliged to should er the burden of proof under § 3 62(g), and to demonstrate that its Chapter 1 1 ban kruptcy was not being pursued in “bad faith.” T o p ut it another way, DBMP had the oblig ation of proving that it has been acting in “goo d faith.”

47 Although the majority recognizes the appli cability of the § 362 statutory framework, it has, like the underly ing courts, failed and r efused to apply it. P arting ways with my friends, I would apply the § 362(d) framewo rk and rule that the Be rgrud Estate an d the Herlihys are entitled to relief from the auto matic stay. And that i s because the Ber gru d Estate and the Herlihy s have not only presen ted “cause” sufficient to support such relief (i.e., the Debtor ’ s pe rvasive bad faith), but also because DBM P — as t he Debtor opposing relief — failed to carry its burden of disprovin g “bad faith.” See 1 1 U.S.C. § 362(g)(2). T o that end, as multipl e courts of appeals have observed, a show ing of “bad faith” is sufficient cause for li fting the protection s afforded to a debtor by the automatic stay. See, e.g., In r e Laguna Assocs. Ltd. P’ ship, 30 F.3d 734 (6th Cir. 1994), as amended on denial of r eh’g and r eh’g en b anc (Sept. 9, 1994) (recognizing that “a debto r ’ s lack of good faith in filing a petition f or bankruptcy may be the basis for lifting the au tomatic stay”); I n re Arnold, 806 F.2d 937, 9 39 (9th Cir. 198 6) (specifying that “[t]h e debtor ’ s lack of good faith in filing a bankruptcy petition has often been used as cause for removing the automati c stay”); In re L it tle Cr e ek Dev. Co., 779 F.2d 1068, 1071 - 72 (5th Cir. 1986) (recognizing that lack of good faith is “cause” for lifting stay to permit foreclosure). Beyond those authorities from our si ster circuits, this Court has also recognized as much, emphasizing that “§ 362(d)(1)’ s ‘f or cause’ langua ge authorizes the [bankruptcy ] court to determine whether, with respect to the interest s of a creditor [(i.e., the Bergrud Estate and the Herlihys)] seeking relie f [from the stay], a debtor [(i.e., DB MP)] has sought the pr otection of the automatic stay in good faith.” See Carolin, 886 F.2d at 699 (citation modified).

48 Perhaps most notably, the Supreme Court h as recognized that a finding of “bad faith” — i.e., a lack o f “good faith” — con stitutes “cause” for auto matic stay relief. See Raleigh v. Ill. Dep’ t of Rev., 530 U. S. 15, 25 (2000) (explaining tha t “lack of good faith” on part of evasive debt or constitutes grounds for lifting automatic stay “for cause” under 1 1 U.S.C. § 362(d) (citing, inter alia, 3 Coll ier on Bankruptcy ¶ 362.07[6][a], at 362 -101 to - 102 (15th ed. rev. 2000) (specifying tha t bad faith commence ment of bankruptcy justifies lifting auto matic stay))). T e llingly, Justice Souter ’ s unanimous decisio n in Raleigh references a highly relevant example of when relief from the automa tic stay is warranted — when the debtor ’ s bankruptcy filing was si mply an effort to avoid other ongoing legal proceedings. Id. (citin g IRS v. Bacha, 166 B.R. 61 1, 612 (Bnkr. D. Md. 1993)). 2. Against this backdrop, it is clear that the Debt or DBMP — backed by the full faith and credit of Certain T eed, throu gh the so - called “fund ing agreements” of the “Project Horizon” plan — was not, and never will be, in any financi al distress, is not seeking t o reorganize for a legitimate purpo se, and other wise has no busines s being the Debtor in this bankruptcy. Simply p ut, the Debtor ’ s Chapt er 1 1 ba nkruptcy is bei ng pursued — at the behest of CertainT ee d’ s lawyers and executives, and at the expense of thous ands of ongoing civil tort lawsuits — in “bad faith.” In fact, t he Debtor DBMP ha s acknowledged that: (1) it can pay its dead and dying asbestos vic tims in full in the civil tort system; (2) its ulti mate French parent, Saint - Gobain, t outs and brags i n public filings th at the Debtor ’ s Chapter 1 1 bankruptcy has delayed making those pay ments to asbestos victims for years, allowing the corporate family to reap millions of d ollars in savings on attendan t litigation costs and

49 expenses; (3) Certain T eed orche strated the “ T exas T wo - Step” man euver with the ver y specific intention of iso lating a single class of its creditors (i. e., its dead and dying as bestos victims), and also intending to shield its run -of -the- mill business credit ors — as well as its own corporate af filiates — from the strictures of a Chapter 1 1 bankruptcy; an d (4) the civi l court asbestos plaintiffs are the victims of CertainT eed ’ s asbestos-riddled produc ts. Nor are the above recitations merely the co njecture of an ol d dissenting judge. Rather, they are findings that were recognized and made by the ban kruptcy court when it extended the protections of the automati c stay to CertainT eed at the outset of the Deb tor ’ s Chapter 1 1 bankruptcy. That is, the bankruptc y court actually reco gnized and found that: • CertainT eed w as “[s]eeking a less expensive way of dealing w ith these tort liabilities” from cla ims filed by asbestos pl aintiffs; • The Debtor DBMP’ s C hapter 1 1 bankruptcy was a long - for mulated plan that started in Februar y 2018, was code - named “Project Hori zon” and was “an attorney - created and i mplemented strategy ‘[t]o facili tate [CertainT eed’ s] ab ility to pursue a § 524(g) resolution’ in bankru ptcy ‘without subjecting the entire . . . enterprise to [C]hapter 1 1’”; • “CertainT eed ne ver entertained a bankrupt cy filing for itself and all of its subsidiaries and a f filiates . . . . This was a profitable going concer n whose assets significantly ou tweighed its combine d operating and asbes tos liabilities. For such an enterprise, a ban kruptcy filing would have seri ous negative consequences ”; and • “Rather[] than file .. . Certa inT e ed or the CertainT eed Enterprise in bankruptcy, the Project Horizon pla n was to isolate the asbest os liabilities in a single affiliated corporation and file it in [C]hapter 1 1.” See J.A. 229 - 32. T aken together, those factu al recitations — made by the bankruptcy court in these proceedings — establish be yond peradventure the nature and extent of the Debtor ’ s bad faith. That is, a fully solvent corporatio n (CertainT eed) consol idated its asbestos -

50 related liabilities into a stooge subsidia ry (DB MP), for the sole purpose of pursuing a sham Chapter 1 1 bankruptcy aimed at denying thou sands of victims of their right to a jury trial, and also to coerce favorable settlements fro m those victims in its preferred bankruptcy forum. Put succi nctly, those facts conclusively estab lish the “bad faith” sufficient to warrant lifting the auto matic stay to allow the Ber grud Es tate and the Herlihys to proceed with quantifying their c ivil tort claims in the W ashington and Cali fornia state courts. Perhaps most disconce rting of all, however, is that the Debtor DBMP presented no evidence to contest or controvert the fac ts recited above, nor did D BMP even seek to prove that it had acted in good faith. Ignorin g the Debtor ’ s burde n of proof under § 362(g), the bankruptcy court — and now, the majori ty — have filled that evi dentiary gap with rank speculation that an awa rd of stay relief would adversely im pact DBMP’ s contrived goal of pursuing a Chapter 1 1 reorganization. But that was and is an imper missi ble burden - shifting, and it has no place in a § 362(d) anal ysis. See, e.g., In re Sonnax Indus., I nc., 907 F.2d 1280, 1285 (2d Cir. 1990). And it is a mistake for the majority t o bless that approach. B. Second, in addition to i gnoring the § 362 statut ory framework for asse ssing whether relief from the autom atic stay was warranted, t he panel majority ha s erred by justify ing the bankruptcy court’ s f lawed actions under the g uise of our Court’ s deci sion in In r e Robbins. Despite acknowledgin g that Robbins did not involve a bad - faith bankruptcy, the majorit y proclaims that the bankruptcy court was never theless entitled to rely on that decision and, on that basis, den y the Bergrud Estate and the Herlihys their request f or relief from the stay.

51 Despite the majority’ s insistence, our 1 992 Robbins precedent si mply has no application to these ext raordinary circumstanc es. Robbins teac hes that, in the context of “good faith” bankruptc ies (i.e., bankr uptcies that are filed by honest debtors for proper a nd legitimate purposes), a bankruptcy court is o bliged to consider the following fa ctors in assessing whether there is sufficient “cause” to lift the aut omatic stay under § 36 2(d): (1) whether the issue s in the pe nding litigation involve only state law, so the expertise of the bankruptcy co urt is unnecessa ry; (2) whether modifying the stay will promote judicial economy an d whether there would be greater interference with the bankruptcy case if the stay were not lifted because matters would have t o be litigate d in bankrupt cy court; and (3) wh ether the estate can be protected properly by a requirement that credi tors seek enforcement of any jud gment through the ban kruptcy court. See Robbins, 964 F.2d at 345. 12 Stated succinctly, Robbins does not apply here. Even if it did, however, the factors identified therein decis ively weigh in favor o f the Bergrud Estate and the Herlihys, and they counsel in favor o f affording § 362(d) relief from the automatic bankruptcy stay. First, the issues pres ented in the W ashington a nd California lawsuits pursued by the Bergrud Estate and the Herlihys involve pure questions of s tate law, and the expertise of a bankruptcy court is en tirely unnecessary. Se cond, an order from the bankruptcy c ourt modifying the automatic stay would promot e judicial economy, in that the Bergrud Estate and the Herlihys w ould then liquidate their asb estos tort claims i n their state court forums 12 Critically, the Ro bbins precedent does not — and otherwise cannot — displace nor supplant § 362 (d)’s statutory fra mework, a s enacted by Congr ess, for assessing when and if relief from the automatic bankruptcy stay is warranted. See 11 U.S.C. § 362(d), (g). And as discussed herei n, that statutory frame work requires an au tomatic bankruptcy s tay to be lifted “for cause.” See, e.g., Raleigh, 530 U.S. at 25; Caro lin, 886 F.2d at 699.

52 without burdening t he bankruptcy c ourt. Lastly, gi ven the Bergrud Estate’ s a nd the Herlihys’ s proposal th at they would only seek collection on a judgment in the Debtor ’ s bankruptcy proceeding s if and w hen their clai ms are finally quan tified, it strains credulity to suggest that the state court trials would be “ interferences” with t he bankruptcy. C. Third, the panel majority has impr operly relied on our Court’ s 1989 Car olin decision for the propo sition that the Bergrud Estate and the Herlih ys are not en titled to relief from the aut omatic stay becaus e the Ba nkruptcy Code mus t be considered i n some “larger context.” See ante at 14. In that regard, my friends recite the Car olin prece dent’ s standard for securing a wholesale dismissal of a bankruptcy, pursuant to 1 1 U.S. C. § 1 112. Thereunder, a party se eking dismissal of a bankruptcy must show both “subjective bad faith” and “objective fu tility” on the part of a d ebtor. See Car olin, 88 6 F.2d a t 700-01. Fixated on that i napt standard, my friends pro claim that “when a bankruptcy court addresses a motion to dismiss a Chapte r 1 1 petition under 1 1 U.S.C. § 1 112(b) (authorizing dismissal ‘for cause ’), it may c onsider a lack of good faith as im plicit in the ‘ca u s e ’ requirement.” See ante at 14. From there, the majority leaps further into the abyss of the illogical, asserting that “a bad - faith cause for dismissal of a petition or for granting a motio n to lift the automatic s tay is not with out boundaries.” I d. That is, the majority blur s the distinction between the dismissal sta ndard under § 1 112(b), and the § 362(d) standard for relief from the automatic stay. Not only that, t he majority insists that the bankruptc y court correctly applied Car o lin in ruling that “there was a lack of evidence in the record of

53 subjective bad faith [b y the Debtor], and eve n if there were s uch evidence, the [Bergrud Estate and the Herlihys ] . . . failed to meet the objective futility requir ement.” Id. at 15. As a threshold matter, it is entirely unclear how Carolin ’ s “o bjective futility” and “subjective bad faith” r equirements — which are relevant to a creditor securing dismissal of a bankruptcy under 1 1 U.S.C. § 1 1 12 — h ave any bearing on the discrete question of whether the Bergrud Estate and the Herlihys should have been awa rded relief from the automatic stay under 11 U.S.C. § 362(d). 13 T o be sure, our Court in Car olin recognized the difference between those two statu tory standards. But the majority ignores t hat precedent and plows th is furrow again. See 886 F.2d at 699. This is another unexplained gap in the majori ty’ s rational e, and it co uld well have dis astrous and uni ntended consequences down the line. Cf. In r e Dixie Br oadcasting, 871 F.2d 1 023, 1029 (1 1th Cir. 1989) (“W e disagree that bad faith constitutin g ‘cause’ for relief fro m a stay automatically equates to bad faith wa rranting dismissal of the petition. If that were true, there w ould not be a need to ever lift a stay for bad fa ith, because the petiti on would necessarily h ave to be dismissed.”). 14 13 To the extent C arolin could apply in these circumstances — which, fo r the several reasons discussed herein, it does not — our Court may have to consider en banc the viability of that precedent, given the de luge of similar “Texa s Two - Step” bankruptc ies that are yet pending in the Western District of No rth Carolina’s bankruptcy court. See, e.g., In re Bestwall LLC, No. 17 - 31795 (Bankr. W.D.N.C.); In re Aldrich Pump LLC, No. 2 0 - 30608 (Bankr. W.D.N. C.); In re Murray Boile r LLC, No. 20-3 0609 (Bankr. W.D.N.C.). 14 Although the majority mentions the bankru ptcy court’s state ment that “lifting the automatic stay would a mount to a de facto dismissal of the ban kruptcy proceeding,” my friends do not serious ly defend that pr oposition. See ante 3, 9. Nor c an they. Instead, my friends simply sugges t that Carolin is satisfi ed here. But again, it makes no se nse to (Continued)

54 Undeterred by such details, the panel majority has parlayed its f aulty Car olin reasoning into the notion that the Debtor D BMP “was legitimately seeking to invoke the § 524(g) process auth orized by Con gress to a ddress the circumstan ces in which it faced 60,000 pending asbe stos-related c laims and ex pected to receive a continuous flow of such law suits for decades to come.” Se e ante at 1 6. Put differently, my friends a ssert that, in filing its Chapter 1 1 pe tition, the Debtor soug ht “protection that the statute prov ided” — i.e., by establishing a § 524(g) trust — s uch that it cannot possi bly be the case that the Debtor has acted in “ba d faith.” Id. at 16 (majority stati ng that “[i]t w ould be hard to argue that DBMP had subjective bad faith in seeki ng the protection that the statute provid ed”). 15 Critically, however, the panel majority’ s rationale fails to acknowledge a di screte issue raised by the Estate and the Herlihys: that is, does § 524(g) of T itle 1 1 provide a valid reorganization purpose when the Debtor DBM P has acted in bad faith by seeki ng pr otection under the Bankruptcy Code in the first place? Contrary to t he majority’ s asse ssment, the answer to that question must emphatical ly be NO. Otherwise, any debtor — even one like the Debtor DBMP, ac ting in abject “bad faith” — can b e improperly ins ulated from conflate the inquiries between a § 1112 dismissal and a § 362(d) aw ard of relief from the automatic bankruptcy s tay. Otherwise, the ba nkruptcy court’s “fears ” of the motions that could be filed in the future is irrelevant and immaterial. What s hould have been relevant to the bankr uptcy court were the motions t hen pending a nd whether those parties — i.e., the Bergrud Estate and the Herlihys — wer e entitled to § 362(d) stay relief. 15 As the Supreme Court recently observed in unanimously rever sing a bankruptcy decision of this Court, § 524(g) “ensures that health claims can be asserted only against the Trust and that [the de btor’s ] operating entiti es will be protected f rom an onslaught of crippling lawsuits that could jeopard ize the entire reorganiz ation effort. ” See Truck Ins. Exch. v. Kaiser Gypsu m Co., 602 U.S. 268, 2 73 (2024) (citation modified).

55 statutory provisions of t he Code that provide cr editors with relief, s uch as § 362(d), so lon g as the debtor invokes § 524(g) as the “basi s” for a bogus Chapter 1 1 r eor ganizatio n. Parting with my friend s, it is apparent that § 5 24(g) is a remedy withi n Chapter 1 1 and made available to an entity “in financ ial distress,” “pr oceed[ing] with honesty,” a nd “plac[ing] virtually all its assets on the table f or its creditors,” t o earn “a fresh start.” See T ruck Ins. Exch. v. Kaiser Gypsum Co., 602 U.S. 268, 273 (2024); Harrington v. Pur due Pharma L.P., 603 U.S. 204, 209 (2024). It is not a bankruptcy “pu rpose” that an ultra - wealthy corporation (s uch as CertainT ee d) is entitled to deploy o n a whim to drive up profits and satisfy shar eholders. As the Ber gr ud Estate and the Herli hys maintain: Congress did not fling open Chapter 1 1’ s do ors to profitable nondistressed debtors [like the Debtor DBMP] who ma nipulate their corporate str ucture to isolate asbestos disease victims when it enacte d § 524(g). Rather, § 524(g) was enacted [by Congress] in the wake of th e Johns - Manville bankruptcy “for use by any asbestos compa ny facing a similarly ov erwhelming [to Johns - Manville] liability.” H.R. Rep. No. 10 3 - 835, at 40 - 41 (1994); see als o Kane v. Johns - Manville Cor p., 843 F.2d 636, 64 0 (2d Cir. 1988) (con firming Manville was faced with “crippling” laws uits); id. a t 649 (recognizing Manville was a “fina ncially besieged e nterprise in desperate need of reorganization of its crushing de bt, both present and future”); S. Rep. N o. 95 - 989, at 9 (1978) (legislative history s uggesting Chapter 1 1 wa s meant to deal “with the reorganization of a financ ially distressed enterpr ise”). See Br. of Appellan ts 39-40 n.19 (citation modified). Furthermore, the pan el majority’ s view of § 524(g) — which lacks support from either the text or his tory of the Bankrupt cy Code — un dermines the fundame ntal proposition that “Chapter 11 was designed to give those teetering on the verge of a fatal financial plummet an opportunity to reorganize on solid ground and t ry again, not to give profitable enterprises an opportunit y to evade contractual or other lia bility.” See In r e S GL

56 Carbon Corp., 200 F.3 d 154, 166 (3d Cir. 1999); accor d In r e S GL C arbon Corp., 200 F.3d 154, 165 (3d Cir. 1999); In r e Little Cr eek Dev. Co., 779 F.2 d 1068, 1071 n.1, 1072 n.2 (5th Cir. 1986); In r e South Beach Securiti es, Inc., 606 F.3d 366, 376 (7 th Cir. 2010); In r e Cedar Shor e Resort, Inc., 235 F.3d 37 5, 381 (8th Cir. 2000); In r e Marsch, 36 F.3d 825, 828 (9th Cir. 1994); In r e Dixie Br oadcas ting, Inc., 871 F.2d 1023, 1027 (1 1th Cir. 19 89). As our distinguished colleague Judge W ilkinson aptly put it not so long ago, bankruptcy is not for “financially healthy compani es with no need to reorganize under the protection of Chapter 1 1.” See In r e Pr emier Auto Servs., In c., 492 F.3d 274, 280 (4th Cir. 2 007). That notwithstanding, the panel majority suggests that the dissent “complete ly misunderstands the § 524(g) process, which [CertainT eed] . .. invoked here.” See ante at 19. The same can be said of the m ajority. In a ddition to the foregoing discussion, it strains credulity for the major ity to suggest that Cer tainT eed “did not prote ct one single dollar fr om asbestos - related liability.” Id. But so w hat? The Debtor DBM P was fabricated by CertainT eed f or the express p urpose of circu mventing our Natio n’ s civil tort sy stem. See Br. of Appellee 14 n.8 (DBMP admitting that it was created by Certa inT eed “to overco me the tort system”). And its bankruptcy is nothing more than a gross attempt to “channel” claims into a preferred forum to extract favora ble settlements and save Certain T eed money. Otherwise, my friends in the majority are c ontent to engage in a rather alarming type of extra - legislative judicial “tort reform.” Ind eed, my friends believe that all corporations facing asbestos - rela ted tort liabilities — regardless of the ir financial status or abi lity to pay claims to dead an d dying American wor kers — should be ent itled to take advantage of § 524(g) by plunderi ng a fabricated corporate shell ent ity into a Cha pter 1 1 bankru ptcy, all

57 because § 524(g) is “quicker, more efficient, and fairer than can be pr ovided by continuing with widely dispersed l itigation in various fed eral and state courts.” See ante at 19. But that rationale wrongly encroaches on t he public policy prerogatives of the Congress, which has repeatedly rejected industry - sp onsored attempts to enact a sbestos - related tort re form in the very same mann er proscribed today by the majority. See Reply Br. of Appellan ts 15 (citing examples of asbestos - related “tor t refor m” legislation rejecte d by Congress). And it otherwise runs afoul of the Supreme Cour t’ s command to leave suc h prerogatives to the Congress. See, e.g., Amchem P r ods. v. W inds or, 521 U.S. 591, 62 8 - 29 (1997) (G insburg, J.) (recognizing, post - e nactment of 1 1 U.S.C. § 524(g), that argument could “sensibly [be ] made that a nationwide administrat ive claims processing re gime would provide the most secure, fair, and efficient means of c ompensating vic tims of asbestos expo sure,” but otherwise empha sizing that “Congres s ... has not adopted such a solution”); Ortiz v. Fibr eboar d Corp., 527 U.S. 8 15, 865 (1999) (Rehnquist, C. J., concurring) (“[W]e are not free to devise an ideal system for adju dicating [asbestos] claims.... [T]he elephan tine mass of asbestos cases cries out for a legislativ e solution.” (citatio n modified)). * * * At bottom, my friends in the panel majority h ave recognized that “[w]hen a deb tor manipulates the bankr uptcy procedure for some other purpose or steps outside the equitable limitations of the Bankr uptcy Code, his good f aith comes into questio n, placing in doubt any relief he seeks in ba nkruptcy.” S ee ante at 14 (emphasis added). And that is precisely what occurred here. As related abo ve, however, the majority has ignored that

58 proposition and excused the extensiv e “bad faith” of the Debtor D BMP — its o wners, CertainT eed and the French entity, Saint-Goba in — which fatally infe cts this record. I V. All these page s later, I am unable to shake off the prophetic a nd impactful wor ds of the late Judge Joseph H. Y ou ng of the District of Maryland. Judge Y oung’ s words are the proverbial “canary in t he coal mine,” and the y bear repeating once more: Chapter 1 1 [of the Bankruptcy Code] was desi gned to give those teetering on the verge of a fatal financial plummet an opportunity to reorganize on solid ground and try again, not to give profitable enterprises an oppor tunity to evade contractual or other liability. And the purpose of the automati c stay is to preserve a debtor ’ s assets and permit an orderly, as opposed t o chaotic, distribution or reorganization. The automatic stay was not intend ed to grant defendants a last-minut e escape chute out of p ending civil litigation. See Furness v. Lilie nfield, 35 B.R. 1006, 1009 (D. Md. 1983) (em phasis added). By today’ s decision, th e panel majority ignores Judge Y oung’ s 43 -ye ar - old klaxon call and continues our Court’ s distressin g march into being the “saf e harbor” for the “big guys” — here, Certain T eed, acting t hrough its stooge subsidiary, the Debtor DBMP, and at the behest of its Fre nch parent, Saint - Gobain — that seek bankruptcy protecti on to avoid accountability for thei r asbestos - related tort liabilities. I wil l not support that effort. Rather, I am of opinion that the Bergrud Estate and the Herlihys are entitled to the limited relief they seek — that is, relief from the a utomatic stay in order to quantify their state -la w asbestos tort claims ag ainst CertainT ee d, the Debtor DBMP, and oth er corporate entities. Pursuant to the foregoi ng, I am compelled to wholeheartedly dissent.