from the debtor’s prepetition conduct
and the claimant had some prepetition
relationship with the debtor, such as
contact, exposure, impact, or privity.
See, e.g., Epstein v. Official Committee
of Unsecured Creditors of Estate of Piper
Aircraft Corp., 58 F.3d 1573 (11th Cir. 1995).
In Grossman’s, a claimant was allegedly
exposed to asbestos when she used the
debtors’ products in 1977, 20 years before
the debtors filed their Chapter 11 cases.
In 2007, after the commencement of
the debtor’s bankruptcy, the claimant
was diagnosed with mesothelioma, a
cancer linked to asbestos exposure.
overruling in Jeld-Wen, Inc. v. Van
Brunt (In re Grossman’s Inc.), 607 F.3d
114 (3d Cir. 2010), its prior adoption
of the right to payment approach.
because they arose subsequent to
the plan’s effective date, according
to state law. On appeal, the District
Court affirmed the Bankruptcy Court’s
holding with respect to the tort claims,
and the debtors’ successor appealed
the decision to the 3rd Circuit.
Courts outside the 3rd Circuit have
routinely declined to follow Frenville’s
right to payment test, reasoning that
a test focusing exclusively on when a
right to payment accrues or matures
conflicts with the Bankruptcy Code’s
expansive treatment of a claim. Indeed,
the Frenville decision has long been
“one of the most criticized and least
followed precedents decided under
the current Bankruptcy Code.” See e.g.,
Firearms Imp. & Exp. Corp. v. United
Capital Ins. Co. (In re Firearms Imp. &
Exp. Corp.), 131 B.R. 1009, 1015 (Bankr.
S.D. Fla. 1991); see also Emons Indus.,
Inc. v. Allen (In re Emons Indus., Inc.),
220 B.R. 182, 193 (Bankr. S.D.N. Y. 1998).
In the wake of Frenville, courts generally
adopted the conduct test or the
prepetition relationship test. Perhaps as
a result of this criticism, the 3rd Circuit
departed from its prior jurisprudence,
Shortly thereafter, the claimant
commenced a state court tort and
breach of warranty action against the
debtors’ successor-in-interest and other
companies that allegedly manufactured
the asbestos-containing products.
Relying on the Frenville decision,
the Bankruptcy Court held that the
asbestos claims were not discharged
by the debtors’ Chapter 11 plan
The 3rd Circuit thus struck down the
longstanding accrual test established
in Frenville and held that a claim
arises when an individual is exposed
prepetition to a product or other
continued on page 34
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