January 20, 2012

The test applicable in the Fifth Circuit for whether exposure to asbestos constitutes a "claim" is whether the exposure occurred completely pre-petition. In this case, the expose was completely pre-petition, so the asbestos injury (which didn't manifest in the wife of the debtor's worker until years after confirmation) was a dischargeable "claim" if adequate due process was provided.

Due process notice of the claims bar date was effected through publication. At the time of the publication, the wife had no reason to know she had an injury. Nor did the debtor have reason to suspect that it faced asbestos issues, since no such claims had been asserted against at that time.

Barring claims held by persons who may not have been aware of their claims on or before the bar date can be a harsh result. Often, the rights of such claimants are addressed through the appointment of a future claims representative. Here however, the rights of such claimants did not warrant such protection, since: (i) there weren't many of the claimants and (ii) the debtor wasn't specifically aware that claims of this nature might be asserted against it in the future.