Asbestos defendant declares bankruptcy

CHARLESTON – A New Jersey-based aluminum company has declared Chapter 11 bankruptcy, which has led to it removing an asbestos lawsuit filed against it in Kanawha County Circuit Court to federal court.

Consolidated Aluminum Corp., which ceased operations in 1994, declared bankruptcy on Dec. 15. The company still exists to manage litigation against it.

According to its bankruptcy petition, the company has between 100-199 creditors but only between $500,001 and $1 million in assets. Its largest creditor is Lonza America, to which it owes more than $72 million for an inter-company loan.

Consolidated Aluminum, which did business as Conalco, was named as one of 53 defendants in John and Gloria Davis’ lawsuit, filed May 14, 2010, in Kanawha Circuit Court.

The couple are represented by James A. McKowen of James F. Humphreys & Associates and Victoria Antion of Motley Rice’s Morgantown office.

The complaint says John Davis, of Parkersburg, suffers from lung cancer. He worked for Consolidated Aluminum in Hannibal, Ohio, from 1958-79.

Conalco’s removal notice says the U.S. District Court for the Southern District of West Virginia has jurisdiction over the case because of the federal bankruptcy proceeding.

“Under the ‘conceivable effect’ test, ‘the proceeding need not necessarily be against the debtor or against the debtor’s property.’ An action is ‘related to’ bankruptcy if the outcome could alter the debtor’s rights, liabilities, options, or freedom of action (either positively or negatively) and which in any way impacts upon the handling of the bankrupt estate,” the removal notice says.

“’Related to’ jurisdiction exists here because the claims asserted in the State Court Action seek monetary damages from the Debtor.”

From the West Virginia Record: Reach John O’Brien at jobrienwv@gmail.com.