DO NOT PUBLISH
The Property Damage Advisory Committee appeals from the bankruptcy court's denial of its motion to compel payment of counsel fees from the Asbestos Settlement Trust.
This appeal arises out of long-standing personal injury and property damage claims relating to the manufacture and use of building materials containing asbestos. The Asbestos Settlement Trust (the Trust) was formed after Celotex Corporation and Carey Canada Inc.—respectively, a manufacturer and distributor of asbestos—filed for Chapter 11 bankruptcy protection in 1990 after being named as defendants in thousands of asbestos-related lawsuits.
This particular appeal requires us to answer when counsel for the Property Damage Advisory Committee is entitled to recover fees for services under the Trust Agreement. The Second Amended and Restated Asbestos Settlement Trust Agreement creates a number of bodies to facilitate the processing and administration of property damage claims. Of particular relevance to this appeal, the Trust Agreement establishes the Property Damage Advisory Committee (the Committee) to aid in the resolution of property damage claims against the Trust.
In addition to the duties assigned in the Trust Agreement, the Committee has specific responsibilities in the Third Amended and Restated Asbestos Property Damage Claims Resolution Procedures (APDCRP). This document obligates the Property Damage Claims Administrator to "participate and consult with the [Committee] on all major policy and administrative decisions affecting . . . implementation of the APDCRP." APDCRP § II. The Administrator must also obtain the Committee's consent when affecting any "material changes . . . in these APDCRP for processing Asbestos Property Damage Claims, but not related to specific amounts to be paid or percentages to be paid."
In connection with these duties, the Trust Agreement requires the Trust to reimburse all reasonable expenses incurred by the Committee "in connection with the performance of [its] duties hereunder, including costs and fees of professionals and experts." Trust art. 8.6(c).
In October 2006, the Property Damage Claims Administrator informed the bankruptcy court that all property damage claims had been processed, although some issues remained as to the payment of some approved claims. In February 2009, after three years of adjudicating those payment issues, the bankruptcy court established a cut-off date of August 12, 2009 for "any and all claims arising from or relating to [property damage claims] that were allowed by the Property Damage Claims Administrator but not promptly paid by the trust."
Even after the cut-off date passed, a number of property damage claims remained outstanding against the Trustees, including claims for breach of express and implied contract; breach of trust; and breach of fiduciary duty. The claims largely arose out of delayed payment of property damage claims that had been allowed by the Claims Administrator and the allegedly unequal treatment of property damage claimants as compared to personal injury claimants. Also after the cut-off date, the Trust filed an annual report explaining the status of existing claims against the Trust in May 2010 and served it on the Committee.
In June 2010, in connection with these remaining claims, the Committee filed a motion to compel the Trust to pay its counsel fees. The bankruptcy court denied the motion in part. The parties disputed whether the Committee still existed after the cut-off date for filing new claims. The court ruled that although the Committee still existed under the Trust Agreement, the Committee had no duties to perform under the Agreement after the cut-off date of August 12, 2009. The bankruptcy court explained that the Committee's duties were limited to "the formulation and administration of claims resolution procedures" as outlined in Section II of the APDCRP. Relying upon this assumption, the bankruptcy court reasoned that the Committee's claims-processing duties ceased after August 12, 2009—the cut-off date for filing or processing any additional claims against the Trust. The district court affirmed the bankruptcy court, and the Committee appealed.
We examine a bankruptcy court's fact-finding for clear error and its legal conclusions
To begin, we agree with the bankruptcy court that the Committee still exists under the Trust Agreement. Article 8.1 of the Trust Agreement provides that the Committee "shall exist . . . until the date the Trust pays the last Allowed [Property Damage] Claim and all disallowed [property damage] claims have been disallowed by final, non-appealable order." Article 1.24 of the Modified Joint Plan of Reorganization defines a property damage claim to include "any claim . . . relating to or arising by reason of, directly or indirectly, property damage." Thus, if there are any unresolved claims that arose out of asbestos property damage, even indirectly, then the Committee continues to exist. The outstanding claims—breach of express and implied contract, breach of trust, and breach of fiduciary duty—arose out of the Trust's alleged duty to pay property damage claims in accordance with the terms and procedures outlined in the Trust Agreement and accompanying plan documents. Therefore, the Committee still exists.
We turn next to the duties of the Committee under the Trust Agreement. Section 8.1, which is entitled, "Formation; Duties," identifies two core duties of the Committee. First, "[t]he Trustees must consult with the PD Advisory Committee on matters [concerning the APDCRP]." Trust art. 8.1;
In reaching this conclusion, we have rejected the bankruptcy court's ruling and the Trust's argument that the Committee's duties were limited to the duties enumerated in the APDCRP. The Committee correctly points out that its duties are broader than facilitating the processing of new property damage claims under the APDCRP. For example, the Trustees are obligated to furnish the Committee with annual financial reports and reports regarding the number and type of claims disposed of during the previous fiscal year.
At this juncture, we need not delineate all the Committee's duties under the Trust Agreement. It suffices for now to say that at least some duties under the Trust Agreement were broader than those identified in the APDCRP, and that the Committee performed those broader duties even after the cut-off date for filing new claims against the Trust.
For these reasons, we VACATE the bankruptcy court's order, and
REVERSE and REMAND for further proceedings consistent with this opinion.