Counsel For Cyprus Historical Excess Insurers

Case 19-10289-LSS Doc 991 Filed 09/03/19 Page 1 of 31
IN THE UNITED STATES BANKRUPTCY COURT FOR THE

DISTRICT OF DELAWARE
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:
In re: : Chapter 11
:
1
IMERYS TALC AMERICA, INC., et al., : Case No. 19-10289 (LSS)
:
Debtors. : (Jointly Administered)
:
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CYPRUS HISTORICAL EXCESS INSURERS’

OBJECTION TO THE FUTURE CLAIMANTS’ REPRESENTATIVE APPLICATION
TO CO-RETAIN GILBERT LLP AS SPECIAL INSURANCE COUNSEL WITH THE
OFFICIAL COMMITTEE OF TORT CLAIMANTS [DKT. 942]
STAMOULIS & WEINBLATT LLC

800 N. West Street, Third Floor
Wilmington, Delaware 19801
Telephone 302 999 1540
O’MELVENY & MYERS LLP

Times Square Tower
7 Times Square
New York, New York 10036-6537
Telephone 212 326 2000
Counsel for Cyprus Historical Excess Insurers

TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT ................................................................................................... 1
FACTS ........................................................................................................................................... 2
The Current and Future Tort Claimants have adverse interests because their
claims arise out of exposures to different products. .......................................................... 2
The Current and Future Tort Claimants have adverse interests because they
assert claims against different entities with varying levels of liability. ............................ 2
The Current and Future Tort Claimants have adverse interests because their
claims arise under different insurance policies. ................................................................ 3
Gilbert LLP has represented the tort claimants since pre-petition. .................................. 3
Gilbert LLP will be representing adverse parties on issues integral to the
settlement of insurance proceeds where those clients are adverse................................... 4
The FCR is prevented from asserting extra-contractual claims against the Cyprus
Historical Excess Insurers. ................................................................................................ 6
The FCR’s Motion ignores clear conflicts of interest contemplated by the Court
months ago. ........................................................................................................................ 6
The FCR’s Motion excludes any reference to conflict waivers. ....................................... 7
ARGUMENT ................................................................................................................................. 7
I. THE FCR AND TCC HAVE INHERENTLY ADVERSE INTERESTS THAT
ARE EXACERBATED BY SHARING INSURANCE COVERAGE COUNSEL. ......... 8
II. INTRA-CLASS CONFLICTS OF INTEREST AMONG SUBCLASSES
WITHIN THE FCR AND TCC JUSTIFY DENYING GILBERT’S JOINT
RETENTION. .................................................................................................................. 10
III. GILBERT LLP’S JOINT REPRESENTATION OF THE FCR AND TCC
CREATES AN ACTUAL CONFLICT OF INTEREST THAT IS PER SE
DISQUALIFYING. ......................................................................................................... 15
IV. THE FCR’S AND GILBERT LLP’S DISCLOSURES ARE INADEQUATE,
FAIL UNDER BANKRUPTCY RULE 2014, AND DO NOT SATISFY THE
CONDITIONS ESTABLISHED BY THE COURT. ...................................................... 19
V. JOINT RETENTION WILL NOT SAVE THE ESTATE COSTS, AND IN ANY
EVENT, THE RISKS ARISING OUT OF THE INTER-CLASS AND INTRA-
CLASS CONFLICTS OUTWEIGH ANY MINOR ECONOMIC BENEFITS. ............. 20
CONCLUSION ............................................................................................................................ 22
i
TABLE OF AUTHORITIES
Page(s)
Cases
Amchem Prod., Inc. v. Windsor,
521 U.S. 591 S. Ct. 2231 L. Ed. 2d 689 (1997) .......................................................................... 7
Arkansas Co., Inc. v. Benenson & Scher, P.A.,

798 F.2d 645 (3d Cir. 1986) ..................................................................................................... 5
Atasi Corp. v. Seagate Technology,

847 F.2d 826 (Fed.Cir.1988) .................................................................................................... 15
Decora Inc. v. DW Wallcovering, Inc.,

899 F. Supp. 132 (S.D.N.Y. 1995) ........................................................................................... 15
Dewey v. Volkswagen Aktiengesellschaft,

681 F.3d 170 (3d Cir. 2012) ........................................................................................... 8, 10, 11
EZ Paintr Corp. v. Padco, Inc.,

746 F.2d 1459 (Fed.Cir.1984) .................................................................................................. 15
Georgine v. Amchem Prod., Inc.,

83 F.3d 610 (3d Cir. 1996) ......................................................................................................... 7
In re Amatex Corp.,
755 F.2d 1034 (3d Cir. 1985) ..................................................................................................... 8
In re Anver Corp.
44 B.R. 615, 617 (Bankr. D. Mass. 1984) ............................................................................... 5
In re Busy Beaver Bldg. Centers, Inc.,

19 F.3d 833 (3d Cir. 1994) ................................................................................................... 5, 6
In re Cmty. Bank of N. Virginia Mortg. Lending Practices Litig.,

795 F.3d 380 (3d Cir. 2015) ..................................................................................................... 10
In re Cmty. Bank of N. Virginia,

622 F.3d 275 (3d Cir. 2010) ..................................................................................................... 10
In re Congoleum Corp.,
426 F.3d 675 (3d Cir. 2005) ..................................................................................................... 13
In re Johns-Manville Corp.,
68 B.R. 618 (Bnkr. S.D.N.Y. 1986)............................................................................................ 8
In re Leslie Controls, Inc.,

437 B.R. 493 (Bankr. D. Del. 2010) ........................................................................................... 8
In re Nat'l Football League Players Concussion Injury Litig.,

821 F.3d 410 (3d Cir. 2016) ..................................................................................................... 10
1
TABLE OF AUTHORITIES
Page(s)
In re Pac. Sunwear of California, Inc.,
No. 16-10882 (LSS), 2016 WL 3564484 n. 64 (Bankr. D. Del. June 22, 2016) ...................... 11
In re Pac. Sunwear of California, Inc.,

No. 16-10882(LSS), 2016 WL 4250681 (Bankr. D. Del. Aug. 8, 2016) ................................. 11
In re Target Corp. Customer Data Sec. Breach Litig.,

No. MDL 14-2522 (PAM), 2017 WL 2178306 (D. Minn. May 17, 2017) .............................. 10
Mitchell v. Metro. Life Ins. Co.,

No. 01 CIV. 2112 (WHP), 2002 WL 441194 (S.D.N.Y. Mar. 21, 2002) ................................. 15
Ortiz v. Fibreboard Corp., 527

U.S. 815 S. Ct. 2295 L. Ed. 2d 715 (1999) ..................................................................... 7, 10, 12
Papanicolaou v. Chase Manhattan Bank,

N.A., 720 F.Supp. 1080 (S.D.N.Y.1989) ................................................................................. 15
United States ex rel. Bahsen v. Bos. Sci. Neuromodulation Corp.,

147 F. Supp. 3d 239 (D.N.J. 2015) ........................................................................................... 15
Statutes
11 U.S.C. §1103(b) ......................................................................................................................... 6
Other Authorities
National Law Journal Billing Survey for 2017 at
https://www.law.com/nationallawjournal/2018/05/17/hourly-rate-gap-widens-as-top-billers-
leave-others-behind/?slreturn=20190413172630
and for 2014 at https://www.law.com/nationallawjournal/almID/1202636785489/ ................ 17
2
PRELIMINARY STATEMENT
The Future Claimants’ Representative’s Motion to Co-Retain Gilbert LLP as Special
Insurance Counsel with the Current Tort Claimants should be denied. First, neither the FCR’s
Motion nor Gilbert LLP’s disclosures discuss the debilitating conflicts of interest Gilbert LLP
will have if it simultaneously represents such adverse clients as the FCR and TCC. The FCR and
TCC have inter-class conflicts because they seek to increase their shares of the same pie in a
zero-sum game to pay off their respective tort claimants, as the U.S. Supreme Court and
countless Third Circuit cases note. The FCR and TCC also have intra-class conflicts arising out
of the disparate classes of tort claimants within each committee, as this Court noted on April 26,
2019. Subclasses represented by separate counsel must be created within the FCR and TCC to
address these intra-class conflicts, as opposed to sweeping these conflicts under the rug as the
FCR would prefer. The Third Circuit Ortiz decision says as much. Gilbert LLP is per se
disqualified from representing such adverse parties in this “unique” bankruptcy case where,
unlike in other asbestos-related bankruptcies, the tort claimants are still being exposed to the
product.
Avoiding conflicts of interest is particularly important to the Cyprus Historical Excess
Insurers because an independent FCR would be a bulwark against the inflation of current tort
settlements and against the payment of meritless current tort claims—an issue on which the FCR
and the Estate are also aligned or should be.
Second, co-retention of Gilbert LLP will remove a crucial safety mechanism through which
the TCC and FCR—which have adverse interests—can check and balance each other and reduce
meritless claims and unnecessary expenses for the Estate. Any “duplication” of efforts is better
understood as “protection” against inflated payment of Estate proceeds to undeserving tort

1
claimants. It is a key protection, removal of which comes at the expense of future claimants,
Cyprus Historical Excess Insurers, and, ultimately, the Estate. And the lack of disclosure on
additional contract attorneys to be hired by Gilbert LLP begs the question whether co-retention
will actually increase costs to the estate.
Finally, Young Conaway averred in its Declaration in support of its representation of the
FCR that additional FCR representative would be “duplicative” and unnecessarily costly to the
estate. Indeed, Young Conaway avers that it has the necessary expertise in dealing with insurance
in the context of mass-tort bankruptcies. That no justification for Gilbert LLP’s joint
representation has been put forward raises the specter of whether the purpose behind the co-
retention is to protect from disclosure communications that Gilbert LLP averred did not occur pre-
petition, when it is now clear that Gilbert LLP has been working behind the scenes with the FCR
since before this bankruptcy matter was filed.
FACTS
The Current and Future Tort Claimants have adverse interests

because their claims arise out of exposures to different products.
The TCC is composed of tort claimants that assert current injuries allegedly caused by
exposure to different products: (i) cosmetic talc in baby powder, (ii) industrial talc, and (iii)
asbestos. The FCR represents claimants who have not yet been injured by or even exposed to
the above three products.

because they assert claims against
different entities with varying levels of liability.
The five entities that seek insurance coverage from Cyprus Historical Excess Policies are
Cyprus Mines Corporation, Cyprus Amax Minerals Company, Imerys Talc America, Inc. (on its
own and as successor to Luzenac America, Inc. and Cyprus Talc Corporation), Freeport-
2
McMoRan, Inc., and Rio Tinto America, Inc. (formerly known as RTZ America Inc.). Each
party has engaged insurance coverage counsel. The TCC and FCR tort claimants have asserted
and will assert claims against all of these distinct parties to the bankruptcy, among other entities.
Certain parties manufactured cosmetic talc while others manufactured industrial talc, with
differing exposure levels for the public.
Some entities’ insurance policies—for instance those policies issued to Rio Tinto—do
not cover claims involving asbestos. Thus, tort claimants with asbestos personal-injury claims
against Rio Tinto have lower value claims that are not backed by insurance.

because their claims arise under different insurance policies.
Both the TCC and FCR may assert claims arising out of exposures going back to at least
1960 through today. Insurance policies were issued to Cyprus Mines and Cyprus Amax until
1988, and not afterward. Standard Oil (which was an indirect prior owner of the Debtors) was
issued insurance from 1980 to 1985. Rio Tinto’s policies—issued from May 2001 to May
2011—also cover entirely different time periods. Debtors have policies issued from 2012–2015.1
Debtors acknowledge that “where a claimant’s alleged date of first exposure to talc occurs after a
certain date, the claim may not be covered under some of the insurance policies.”2
Gilbert LLP has represented the tort claimants since pre-petition.
Gilbert LLP claims to have been involved in the case since “mid-March,” but Gilbert
LLP has been less than forthcoming, as demonstrated by their Compensation Requests.3 The
1
See generally DKT. 10, Picard Declaration at 17-20.
2
Id. at 20.
3
Gilbert Dep. Tr. at 44–45 (“SVIRSKY: And that was—you say since your retention which you said
was in March sometime? GILBERT: Mid-March. SVIRSKY: Did you meet with anybody at Imerys
before mid-March? GILBERT: I've answered that already. I have never met anyone at Imerys prior
to our retention. I have not spoken to them. I didn’t speak to them at Latham. My only
3
firm’s presence had not been made apparent until April 30, 2019.4 While Cyprus Historical
Excess Insurers asked Debtors directly about Gilbert LLP’s involvement in the case,5 Debtors
refused to disclose their collaboration with Gilbert LLP.6 As it turns out, Scott Gilbert and Jeff
Bjork, Debtors’ lead bankruptcy counsel from Latham & Watkins, had a “follow-up”
conversation on February 27.7 In fact, though averring that Gilbert LLP was only retained “mid-
March,” Gilbert LLP was communicating with the FCR pre-petition and thereafter analyzing
privilege protections over those communications undoubtedly as a result of potential conflicts of
interest.8 One of Gilbert LLP’s most recent Applications for Compensation reveals that Gilbert
LLP is “[a]nalyz[ing] privilege protection for pre-petition communications with Future
Claimants’ Representative.”9
Gilbert LLP will be representing adverse parties

on issues integral to the settlement of insurance proceeds
where those clients are adverse.
Though representing the TCC since pre-petition, Gilbert LLP plans to work for the FCR
and TCC by, at the very least, continuing the work it has done for the TCC, which includes:
communication with any of the plaintiffs with respect to Imerys was when I was called and asked to
make a presentation in mid-March.”).
4
DKT. 471, Application to Retain Gilbert LLP as Special Insurance Counsel.
5
See Schweon Decl. attached to Certain Excess Insurers Motion to Compel (Dkt. 394), at Ex. 1,
Certain Excess Insurers First Set of Requests for Production to Debtors, at Nos. 9-10; see id. at Ex. 5,
Letter from T. Schiavoni for Certain Excess Insurers to J. Bjork, Counsel for Debtors, Dated April 16,
2019; id. at Ex. 6, Letter from K. Posin, Counsel for Debtors, to T. Schiavoni, Dated April 18, 2019.
6
See id at Ex. 6, Email from K. Posin, Counsel for Debtors, to T. Schiavoni, Dated April 18, 2019
(“Your April 16 letter also questions the involvement of Scott Gilbert. Scott Gilbert has not been
retained by the Debtors.”).
7
DKT. 415-2, First Monthly Application of Latham & Watkins for Allowance of Compensation, at 24
of 137 (02/27/2019: “Emails with N. Ramsay and conference call with N. Ramsay and R. Levy
regarding committee formation issues (0.6); follow up conference call with S. Gilbert regarding same
(0.3)”).
8
Dkt. 841-1, Summary of Third Monthly Application for Compensation from Gilbert LLP at 4
(“6/10/19 Analyze privilege protection for pre-petition communications with Future Claimants’
Representative.”)
9
Id.
4
• meeting with the TCC and Debtors regarding plan negotiations,10
• analyzing insurance coverage issued in different policy periods, covering different
groups of claimants, issued to different insured parties, including Cyprus Mines,
Amoco, Standard Oil, and Debtors,11
• reviewing tort claimants’ allegations for the purpose of determining insurance
availability,12
• negotiating settlements with Rio Tinto, certain insurers, Debtors, Cyprus Mines,
and other parties,13
• valuing claims asserted by future tort claimants,14
10
Dkt. 754-1, June 27, 2019 Summary of First Monthly Application of Gilbert LLP for Compensation
at 9 (“4/16/19 Meet with Committee and Debtors re plan negotiations.”).
11
at 6-9 (“4/15/19 Review, analyze, and synthesize Sierra Talc insurance policies”; “4/15/19 Continue
analyzing 1972-1976 Cyprus Mines insurance policies”; “4/15/19 Review 1986-1988 Cyprus
insurance policies for key language”; “4/16/2019 Review 2012-2013 Imersys [sic] insurance policies
for key language”; “4/18/19 Revise analysis of Standard Oil insurance policies based on additional
information re relevant provisions”; “4/26/19 Review and analyze Standard Oil insurance policies
from 1980-1981”; “4/26/19 Review XL umbrella policy re fire insurance claim”); Dkt. 841-1,
Summary of Third Monthly Application for Compensation from Gilbert LLP at 1, 11 (“6/3/19
Continue review and analysis of Johnson & Johnson 1978-79 policies.”; “6/25/19 Revise background
memorandum re Amoco insurance coverage.”).
12
at 6-9 (“4/23/19 Review MDL complaints re coverage implications.”).
13
Dkt. 841-1, Summary of Third Monthly Application for Compensation from Gilbert LLP at 1, 11, 12
(“6/3/19 Analyze Rio Tinto policies and corporate agreements in preparation for meeting with Rio
Tinto principals and insurers”; “6/4/19 Participate in settlement meeting with Rio Tinto; follow up
with claimant representatives re same.”; “6/4/19 Prepare for and meet-and-confer with Rio Tinto,
Zurich, Imerys, and Committee counsel re Rio Tinto and Zurich insurance and settlement.”; “6/25/19
Meet with representatives of Cyprus re potential negotiations.”; 6/28/19 Correspond with A. Elbert re
Cyprus negotiations.”)
14
(“6/25/19 Research re future claims valuation factors and matrix.”; “6/28/19 Analyze insurance issues
related to Cyprus shared policies.”); Dkt. 957 Summary of Fourth Monthly Application for
Compensation from Gilbert LLP at 7 (“7/15/19 Review and analyze memorandum re data re future
claims projection.”).
5
• analyzing tort claims against Cyprus for the purpose of allocating insurance
coverage,15
• analyzing the Booker and Lanzo individual tort claimants’ insurance coverage,16
The FCR is prevented from asserting extra-contractual

claims against the Cyprus Historical Excess Insurers.
As a result of Young Conaway’s waiver of conflicts related to certain Cyprus Historical
Excess Insurers, the FCR may not assert extra-contractual claims against those insurers.17
The FCR’s Motion ignores clear conflicts of interest

contemplated by the Court months ago.
As noted by this Court, this is a “unique case” because “the product [is] still on the shelves
and we ha[ve], perhaps, an issue that you don’t see in other cases . . . maybe we have three groups
. . . those who have not yet even been exposed, but will be manifesting symptoms in the future.”18
As talc continues to be sold in the market, the tort claims here present an issue unseen in other
cases because some claimants have yet to be exposed. Further, different claimants will be reaching
for different estate assets, as this Court recognized:
I might need multiple FCRs because of either different sources of assets that could
be put in the trusts or the different diseases. I fully understand that, and I would
assume that if, in fact, that becomes an issue, it’s going to have to be dealt with.19
15
(“6/25/19 Analyze pending cases against Cyprus for purposes of insurance allocation and analysis.”).
16
(“6/5/19 Analyze insurance related issues re Lanzo and Booker motions to lift stay.”).
17
See Dkt. 527, Mr. Patton’s Supplemental Declaration at ¶ 7; see also Dkt. 554, Mr. Patton’s Second
Supplemental Declaration at ¶ 5, which is nearly identical to ¶ 7 of Mr. Patton’s First Supplemental
Declaration.
18
April 26, 2019 Transcript of Court Hearing on Motion to Retain the Future Claimants’
Representative, DKT. 464 at 183:19-25 to 184:3-14.
19
6
The FCR’s Motion excludes

any reference to conflict waivers.
The FCR’s Motion does not appear to contain any conflict waiver from the TCC or FCR
regarding Gilbert LLP’s dual representation despite the inherent conflicts between these two
parties.
ARGUMENT
A bankruptcy court is obligated “to police itself and those who practice before it in order
to preserve its integrity and public confidence [and] . . . the Court must be concerned with the
appearance of accommodation among the members of the bankruptcy bar and its effect on
maintaining public confidence in the bankruptcy system.”20 According to the Third Circuit,
Congressional concerns regarding “cronyism of the ‘bankruptcy ring’ and attorney control of
bankruptcy cases” are troubling in the context of the selection of counsel for creditors’
committees, such as the TCC and FCR.21 Bankruptcy courts have an independent duty to protect
the integrity of the bankruptcy system because it may be the only one willing to break the
“conspiracy of silence” between brethren.22 The Court explained, the “integrity of the
bankruptcy system . . . is at stake. . . . The public expects, and has a right to expect, that an order
of a court is a judge’s certification that the result is proper and justified under the law.”23
Bankruptcy courts thus have a solemn responsibility to protect the bankruptcy process
against the self-interest of professionals who stand to gain hugely through its manipulation and
exploitation. Mindful of the significance of its responsibilities, a bankruptcy court must
20
In re Anver Corp. 44 B.R. 615, 617 (Bankr. D. Mass. 1984) (denying an application for the
appointment of counsel for the debtor).
21
Arkansas Co., Inc. v. Benenson & Scher, P.A., 798 F.2d 645, 649 (3d Cir. 1986).
22
In re Busy Beaver Bldg. Centers, Inc., 19 F.3d 833, 843 (3d Cir. 1994).
23
Id. at 841.
7
determine whether it is appropriate for the TCC of FCR to retain professionals. “[E]fficiency in
asbestos-related bankruptcy cases”, the Third Circuit has emphasized, “must not be obtained at
the price of diminishing the integrity of the process;” as a result, “the level of court supervision
must be of a high order.”24 The initial inquiry is whether the applicants “represent any other
entity having an adverse interest in connection with the case.”25 That is the inquiry now before
this Court.
I. THE FCR AND TCC HAVE INHERENTLY ADVERSE INTERESTS THAT

ARE EXACERBATED BY SHARING INSURANCE COVERAGE COUNSEL.
Cyprus Historical Excess Insurers’ interests are aligned with those of the future claimants
with respect to the issue of having an independent FCR involved in the negotiation and
confirmation of the plan of reorganization. While the FCR and TCC have an interest in increasing
the size of the estate proceeds that can be devoted to tort claims, they are adverse on other
significant issues for the estate. An independent FCR should be focused on preventing inflation
of settlements for current tort claimants and reducing meritless claims, significant interests on
which the FCR, the Estate, and Cyprus Historical Excess Insurers agree. Cyprus Historical Excess
Insurers have an interest in seeing that their insurance proceeds are paid only to deserving
claimants suffering from actual injuries, that the amounts paid to such claimants are not inflated,
and that current claimants are not paid prematurely. That the FCR and TCC will be using the same
counsel to analyze and distribute insurance proceeds flies in the face of the adverse interests that
should describe the mostly adverse FCR/TCC relationship. The FCR, and for that matter the
Estate, have the same interest, as the U.S. Supreme Court has noted. In Amchem, for example, the
24
Congoleum, 426 F.3d at 693.
25
11 U.S.C. §1103(b).
8
Supreme Court held that current claimants could not adequately represent future claimants in a
class action because:
[T]he interests of those within the single class are not aligned. Most saliently, for
the currently injured, the critical goal is generous immediate payments [which] tugs
against the interest of exposure-only plaintiffs [i.e., future claimants] in ensuring
an ample, inflation-protected fund for the future.26
There, the Supreme Court cited a similar divergence of interests, stating that “[a]lready
injured parties . . . would care little about [benefits that may be important to future claimants] and
would rationally trade them for higher current payouts.” Amchem, 521 U.S. at 611, 117 S.Ct.
2231; Ortiz v. Fibreboard Corp., 527 U.S. 815, 819, 119 S. Ct. 2295, 2302, 144 L. Ed. 2d 715
(1999) (“First, a class including holders of present and future claims (some of the latter involving
no physical injury and claimants not yet born) requires division into homogeneous subclasses
under Rule 23(c)(4)(B), with separate representation to eliminate conflicting interests of
counsel.”). No “work-around” exists other than to create subclasses represented by counsel “who
understand that their role is to represent solely the members of their respective subgroups.”
Amchem, 521 U.S. at 627, 117 S.Ct. 2231.27 While it is true that future claimants have an interest
in maximizing the amount of insurance available to pay them, that interest necessarily places them
in conflict with current claimants, who want to be paid as much of the insurance as possible now.28
26
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 626 (1997). See also Ortiz v. Fibreboard Corp., 527
U.S. 815, 856 (1999) (a class consisting of current claimants and future claimants must be divided
into subclasses with separate representation because of conflicts of interest).
27
Amchem, 521 U.S. at 627, 117 S.Ct. 2231 (“[w]here differences among members of a class are such
that subclasses must be established, we know of no authority that permits a court to approve a
settlement without creating subclasses on the basis of consents by members of a unitary class, some
of whom happen to be members of the distinct subgroups. The class representatives may well have
thought that the Settlement serves the aggregate interests of the entire class. But the adversity among
subgroups requires that the members of each subgroup cannot be bound to a settlement except by
consents given by those who understand that their role is to represent solely the members of their
respective subgroups.”).
28
Georgine v. Amchem Prod., Inc., 83 F.3d 610, 630 (3d Cir. 1996), aff'd sub nom. Amchem Prod., Inc.
v. Windsor, 521 U.S. 591, 117 S. Ct. 2231, 138 L. Ed. 2d 689 (1997) (“The most salient conflict in
this class action is between the presently injured and futures plaintiffs. As rational actors, those who
9
The Third Circuit recognized this divergence of interests in Amatex, where it explained
that, “if future claimants are excluded from the re-organization plan, the current claimants will
receive a larger portion of an obviously limited fund.”29 Indeed, the Third Circuit recognized this
again in Dewey, reasoning that “once a class member manifested symptoms of asbestos-related
injuries, that class member would be solely concerned with obtaining a generous immediate
payment [ ] for the injury, not securing an ample, inflation-protected fund for the future.” Dewey
v. Volkswagen Aktiengesellschaft, 681 F.3d 170, 185 (3d Cir. 2012); In re Johns-Manville Corp.,
68 B.R. 618, 621 (Bnkr. S.D.N.Y. 1986) (exemplifying the difficulties of protecting future
claimants where trust fund was rapidly depleted and late-arriving future claimants received far less
compensation, creating an inequitable outcome).
An independent FCR who is able to stand up to the demands of current claimants for
immediate access to large amounts of insurance results in more equitable division of estate assets,
prevents inflation of settlements for current tort claimants and reduces meritless claims, significant
interests on which the FCR and Cyprus Historical Excess Insurers are aligned.
II. INTRA-CLASS CONFLICTS OF INTEREST AMONG SUBCLASSES WITHIN THE

FCR AND TCC JUSTIFY DENYING GILBERT’S JOINT RETENTION.
The FCR and TCC are internally conflicted as well because they represent disparate groups
of tort claimants, each with adverse interests. For instance, certain claimant’s complaints assert
personal injuries resulting from talc alone while other claimants assert injuries from asbestos. As
are not yet injured would want reduced current payouts (through caps on compensation awards and
limits on the number of claims that can be paid each year). The futures plaintiffs should also be
interested in protection against inflation, in not having preset limits on how many cases can be
handled, and in limiting the ability of defendant companies to exit the settlement… In contrast, those
who are currently injured would rationally want to maximize current payouts. Furthermore, currently
injured plaintiffs would care little about inflation-protection… In sum, presently injured class
representatives cannot adequately represent the futures plaintiffs' interests and vice versa.”)
29
In re Amatex Corp., 755 F.2d 1034, 1043 (3d Cir. 1985).
10
this Court pointed out, this is a “unique case” because “the product [is] still on the shelves and we
ha[ve], perhaps, an issue that you don’t see in other cases . . . maybe we have three groups . . .
those who have not yet even been exposed, but will be manifesting symptoms in the future.”30 As
talc continues to be sold in the market, the tort claims here present an issue unseen in other cases,
because some claimants have yet to be exposed. Further, different claimants will be reaching for
different estate assets, as this Court recognized:
I might need multiple FCRs because of either different sources of assets that could
be put in the trusts or the different diseases. I fully understand that, and I would
assume that if, in fact, that becomes an issue, it’s going to have to be dealt with.31
Sharing Gilbert LLP as insurance counsel for both the FCR and TCC magnifies these
conflicts of interest because Gilbert LLP will be analyzing the insurance assets available to not
only the disparate current and future claimants, but also analyzing the insurance assets available
among the subclasses within the current and future claimant groups. The U.S. Supreme Court
dealt with a similar issue in Ortiz when holding that a single class that included class members
whose asbestos claims arose before and after the defendant’s insurance policy expired, should have
been divided into subclasses, as those class members whose claims arose before the policy expired
“had more valuable claims” than those whose claims arose afterward. Ortiz v. Fibreboard Corp.,
527 U.S. 815, 857, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999). The same issue exists with regard to
claims asserted against Rio Tinto, insurance for which excludes asbestos-related personal-injury
claims, resulting in claims that are worth less than others. Indeed, Debtors do not dispute that
30
31
11
“where a claimant’s alleged date of first exposure to talc occurs after a certain date, the claim may
not be covered under some of the insurance policies.”32
As the Third Circuit noted in similar circumstances, class members’ interests must not be
antagonistic during settlement negotiations, a conflict that may be avoided by creating subclasses.
In re Cmty. Bank of N. Virginia, 622 F.3d 275, 304 (3d Cir. 2010), as amended (Oct. 20, 2010); In
re Cmty. Bank of N. Virginia Mortg. Lending Practices Litig., 795 F.3d 380, 393 (3d Cir. 2015)
(“class counsel may not, consistent with Ortiz, represent an entire class if subgroups within the
class have interests that are significantly antagonistic to one another.”); see also In re Nat'l
Football League Players Concussion Injury Litig., 821 F.3d 410, 432 (3d Cir. 2016), as amended
(May 2, 2016) (Amchem conflict avoided because there were different representatives for different
subclasses). The adequacy of representation for intra-class claimants “is called into question when
there is no way, absent independent representation, for a court (or plaintiffs) to assess the value of
the different claims.” In re Target Corp. Customer Data Sec. Breach Litig., No. MDL 14-2522
(PAM), 2017 WL 2178306, at *5 (D. Minn. May 17, 2017), aff’d, 892 F.3d 968 (8th Cir. 2018)
(citing Dewey and holding that because damages suffered were easily ascertainable from credit
card purchases, no separate counsel was necessary for disparate class claimants).
Courts around the country prohibit the potential for these intra-class conflicts to impact
how assets are negotiated or ultimately divided. Indeed, the Third Circuit recognized these
conflicts in Dewey when reversing the trial court’s class certification order because of intra-class
conflicts. Dewey v. Volkswagen Aktiengesellschaft, 681 F.3d 170, 190 (3d Cir. 2012). There, a
settlement agreement divided a single class into two groups of plaintiffs that receive different
benefits, “support[ing] the inference that the representative plaintiffs [we]re inadequate.” Id. at
32
Id. at 20.
12
187. Dewey addressed analogous class claim issues when reasoning that “conflict concerning the
allocation of remedies amongst class members with competing interests can be fundamental and
can thus render a representative plaintiff inadequate.” Id. at 184. The Third Circuit gave two ways
to resolve the conflicts there: (i) “do away with the distinction” between the classes, with no
difference in priority or (ii) certify subclasses.
Indeed, this Court in In re Pacific Sunwear of California, Inc., contemplated the two Dewey
solutions when holding that a representative plaintiff could not fairly represent all unnamed class
members in negotiating a settlement where those class members would have different claims
against the estate, as here. See In re Pac. Sunwear of California, Inc., No. 16-10882 (LSS), 2016
WL 3564484, at *9, n. 64 (Bankr. D. Del. June 22, 2016). And “it is irrelevant whether the
proposed settlement actually leaves the weaker positioned class members unharmed; the point is
that the structural protection that is the foundation of Rule 23(a)(4) must be met throughout the
process of bargaining for settlement.” In re Pac. Sunwear of California, Inc., No. 16-10882(LSS),
2016 WL 4250681, at *11 (Bankr. D. Del. Aug. 8, 2016).
The first Dewey solution, to “do away with the distinction between the classes so as to
eliminate any prioritization is inapplicable here. The FCR and TCC have already agreed that the
Lanzo and Booker settlements worth $50 million should move forward yet only two current tort
claimants are involved, a decision that has already reduced the insurance coverage available to
other current tort claimants and future tort claimants. The second option is advocated here.
Here, the FCR and TCC have intra-class conflicts among disparate class groups all vying
for a cut of the estate’s assets. Gilbert LLP is already and will continue to value claims brought
by all subclasses of claimants when analyzing available insurance proceeds, an inherent conflict
that can only be alleviated by creating subclasses represented by separate insurance counsel.
13
Gilbert LLP is negotiating insurance allocation settlements with Debtors, Cyprus, other insurers,
the FCR, and the TCC. In light of all the substantial position, Gilbert LLP has in negotiating a
settlement on behalf of the TCC (which Gilbert LLP has been orchestrating on behalf of the TCC
for months), the adverse subclasses within the FCR (and indeed, within the TCC as well), must
have their own insurance counsel. These subclasses must have different representatives to ensure
each subclasses’ cut of the estate pie is fair. Dewey, In re Pacific Sunwear, and Alchem, among
other cases, support this basic requirement.
Under Ortiz, the simple fact that the current and future tort claimants’ injuries arose at such
substantially different time periods—before and after certain insurance policies expired—requires
division into subclasses with separate representation. Ortiz v. Fibreboard Corp., 527 U.S. 815,
857, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999). Indeed, as Debtors acknowledge, “where a
claimant’s alleged date of first exposure to talc occurs after a certain date, the claim may not be
covered under some of the insurance policies.”33And this neglects the many other reasons
compelling separate subclasses here, including (i) certain insurance policies were issued to Debtors
alone (between 2012 and 2014 at least) while other policies were issued to Cyprus Mines (pre-
1989) and still others were issued to other entities, including Rio Tinto, which has essentially no
insurance coverage, (ii) it neglects the different manner in which tort claimants were exposed to
injuries products (cosmetic talc versus industrial talc), and (iii) it neglects the fact that certain
claimants assert injuries arising out of asbestos while others asset talc-only injuries. These
claimants’ disparate and adverse interests compel subclasses represented by separate insurance
counsel.
33
Dkt. 10, Picard Declaration at 20.
14
III. GILBERT LLP’S JOINT REPRESENTATION OF THE FCR AND TCC CREATES
AN ACTUAL CONFLICT OF INTEREST THAT IS PER SE DISQUALIFYING.
Gilbert LLP has presumptively been assessing claims in favor of the TCC and against the
FCR since at least February in a zero-sum game in favor of the TCC—pursuant to its obligation
to its clients—and thus joint representation of such adverse parties, the FCR and the TCC,
violates the Rules of Professional Conduct. In re Congoleum Corp., 426 F.3d 675, 687–88 (3d
Cir. 2005). “Conflict of interest rules are more strictly applied in the bankruptcy context than in
other areas of the law, at least insofar as they relate to professionals retained by the estate.” 1
Collier on Bankruptcy, § 8.03[1] (15th ed. 2002) (emphasis added).34 As the Third Circuit held
in In re Congoleum, Rule 1.7 of the ABA’s Model Rules of Professional Conduct, provides that,
a lawyer shall not represent a client if there is a ‘concurrent conflict of interest,’ a situation where
either: (1) the representation of one client will be directly adverse to another client; or (2) there
is a significant risk that the representation of one or more clients will be materially limited by the
lawyer's responsibilities to another client, a former client, or a third person or by a personal
interest of the lawyer.” Id.
And fiduciaries cannot waive a potential conflict of interest. See In re Philadelphia
Athletic Club, Inc., 20 B.R. 328, 334 (E.D.Pa.1982) (“professionals engaged in the conduct of a
bankruptcy case should be free of the slightest personal interest which might be reflected in their
decisions concerning matters of the debtors’ estates or which might impair the high degree of
impartiality and detached judgment expected of them”) (emphasis added); In re Glenn Elec.
Sales Corp., 89 B.R. 410, 423 (Bankr.D.N.J.), aff’d, 99 B.R. 596 (D.N.J.1988) quoting 2 Collier
34
The Model Rules of Professional Conduct of the American Bar Association (the “Model Rules”)
govern the practice of law before this Court. Del. Bankr. L.R. 1001–1(b) (adopting the Local Rules of
Civil Practice and Procedure of the United States District Court for the District of Delaware); D. Del.
L.R. 83.6(d) (incorporating the Model Rules).
15
on Bankruptcy, ¶ 327.03 (“professional persons employed by the trustee should be free of any
conflicting interest which might in the view of the trustee or the bankruptcy court affect the
performance of their services or which might impair the high degree of impartiality and detached
judgment expected of them...”).35
“[D]oubts as to the existence of an asserted conflict of interest should be resolved in
favor of disqualification.” In re Meridian Auto. Sys.-Composite Operations, Inc., 340 B.R. 740,
750 (Bankr. D. Del. 2006). And indeed, unknown Future Claimants cannot give informed
consent to waive conflicts of interest. See In re Perry, 194 B.R. 875, 879-80 (“Informed consent
could not be obtained because ... ‘the real parties in interest in this case are the creditors, and that
is not a waivable conflict.’”).
When the FCR and TCC share the same insurance counsel, the inter-class and intra-class
conflicts are exacerbated to the detriment of subclasses that have no separate representation.
Gilbert LLP does not even appear to have obtained effective waivers from the TCC and FCR so
as to waive the conflicts of interest. Nor may it be possible to obtain waivers from claimants who
do not yet exist.36 Gilbert LLP’s conflict of interest could not be made more clear than through
Footnote 2 of the FCR’s Motion and Paragraph 6 of the FCR’s Proposed Order, in which the FCR
contemplates the conflicts of interest and aims to prevent waiver of attorney-client privilege if
35
In re Perry, 194 B.R. 875, 880 (E.D. Cal. 1996) (“[T]he bankruptcy code does not permit [the
bankruptcy trustee] to negate that conflict by signing a waiver .... because the ultimate party at
interest is the creditors of the bankruptcy estate.”); In re Wheatfield Business Park LLC, 286 B.R. 412
(C.D. Cal. 2002) (holding that conflict waiver from debtors and U.S. Trustee was insufficient to
waive conflict of interest, and notice to creditors and their approval was necessary for valid consent).
36
See In re Perry, 194 B.R. 875, 880 (E.D. Cal. 1996) (“[T]he bankruptcy code does not permit [the
bankruptcy trustee] to negate that conflict by signing a waiver .... because the ultimate party at
interest is the creditors of the bankruptcy estate.”); In re Wheatfield Business Park LLC, 286 B.R. 412
(C.D. Cal. 2002) (holding that conflict waiver from debtors and U.S. Trustee was insufficient to
waive conflict of interest, and notice to creditors and their approval was necessary for valid consent).
16
conflicts of interest are even perceived.37 But, the FCR’s statements here cannot prevent waiver.
Paragraph 17 makes this defined risk of waiver even clearer because the FCR cannot avoid
disclosure of privileged documents disclosed to its adversaries. In litigation that the future tort
claimants may bring against the estate, these documents would be discoverable. Having one
counsel assessing the value of all disparate claims flies in the face of Dewey and Alchem, and
indeed more than a handful of other cases in the Third Circuit.
And the FCR’s concerns are well-founded with respect to waiver of attorney-client
privileges “[t]o the extent that the Committee or the Future Claimants’ Representative determines
that a conflict has arisen with respect to the co-retention of Gilbert.”38 Gilbert LLP cannot simply
relinquish its representation of the FCR, retain what privileged information it has gleaned during
its representation of the FCR, and continue representing an adverse client, the TCC. Indeed, ethical
walls cannot prevent such a breach of attorney fiduciary obligations.
• United States ex rel. Bahsen v. Bos. Sci. Neuromodulation Corp., 147 F. Supp. 3d
239, 249 (D.N.J. 2015) (disqualifying firm under New Jersey Rules of
Professional Conduct for untimely imposition of ethical wall where “no notice
was given until after [client] discovered that its prior attorney was now employed
by the firm suing it” and nothing prevented communication between attorneys at
the firm when the conflict first arose);
• Mitchell v. Metro. Life Ins. Co., No. 01 CIV. 2112 (WHP), 2002 WL 441194, at
*10 (S.D.N.Y. Mar. 21, 2002) (disqualifying firm after holding that the firm did
37
FCR’s Motion at n. 2 (“The termination of Gilbert’s representation of the Future Claimants’
Representative due to such actual or perceived conflict shall not affect the confidentiality of any work
product or terminate any joint or common interest privilege between the Future Claimants’
Representative and the Committee or affect the confidentiality of any work performed by Gilbert on
behalf of the Future Claimants’ Representative prior to the termination of the representation.”); Dkt.
942-2, Proposed Order at ¶ 6 (“Co-retention of Gilbert by the Future Claimants’ Representative and
the Committee shall not be deemed a waiver of any common interest privilege, attorney-client
privilege, or work product protection.”).
38
FCR’s Motion at 942-2, Proposed Order at ¶ 5 (“To the extent that the Committee or the Future
Claimants’ Representative determines that a conflict has arisen with respect to the co-retention of
Gilbert, then upon notice to Gilbert, Gilbert shall no longer represent the Future Claimants’
Representative, but shall continue to represent the Committee.3 In such circumstances, the Future
Claimants’ Representative has the right to seek to retain separate special insurance counsel.”).
17
not formally implement an ethical screen until almost two months after it had
actual notice of the conflict, which diminished the possibility that the screen
remedied the conflict.);
• Atasi Corp. v. Seagate Technology, 847 F.2d 826, 831 (Fed.Cir.1988) (holding
that presumption of shared confidences was not overcome by screening where
there was a complete lack of evidence that screening measures were taken at time
of disqualified attorney’s move to the firm);
• EZ Paintr Corp. v. Padco, Inc., 746 F.2d 1459, 1462 (Fed.Cir.1984) (“[I]t was
permissible for her [the district court judge] to hold that the screening
arrangement must be set up ‘when the potentially disqualifying event occurred’
and the new firm knows (or must have been aware) of the problem ...”);
• Papanicolaou v. Chase Manhattan Bank, N.A., 720 F.Supp. 1080, 1087

(S.D.N.Y.1989) (Patterson, J.) (“This Court doubts whether any Chinese walls,
which are meant to be preemptive, can ever function effectively when erected in
response to a motion, and not prior to the arising of the conflict.”) (citations
omitted).
As in the long list of cases above, the same disclosure risks arise here because imposition
of an ethical wall months after Gilbert LLP’s conflict arose does not provide “adequate protection
of confidences.” Decora Inc. v. DW Wallcovering, Inc., 899 F. Supp. 132, 141 (S.D.N.Y. 1995)
(“screening device implemented only after a disqualified lawyer has worked on a case will not
usually provide adequate protection of confidences.”). Thus, not only will Gilbert LLP have
violated the Rules of Professional Conduct, but also all ostensibly privileged communications will
no longer be privileged.
Further, Paragraph 7 of Mr. James Patton’s May 13, 2019 Supplemental Declaration
describes Young Conaway’s engagement letters with insurance companies.39 The Paragraph
states that it applies only to “Bankruptcy Related Matters” and states that Young Conaway will
not represent parties in bankruptcy adversary proceedings involving extra-contractual claims
39
See Dkt. 527, Mr. Patton’s Supplemental Declaration at ¶ 7; see also Dkt. 554, Mr. Patton’s Second
Supplemental Declaration at ¶ 5, which is nearly identical to ¶ 7 of Mr. Patton’s First Supplemental
Declaration.
18
against the insurer clients or their affiliates. Mr. Patton and Young Conaway are constrained
under this waiver language. As a result of the FCR agreeing not to bring extra-contractual
claims against certain Cyprus Historical Excess Insurers, joint retention of Gilbert LLP will be of
the very nature that the FCR expressly promised their clients they would not take on. Gilbert
LLP will be constrained by the same agreement, yet another conflict of interest.
IV. THE FCR’S AND GILBERT LLP’S DISCLOSURES ARE INADEQUATE, FAIL UNDER
BANKRUPTCY RULE 2014, AND DO NOT SATISFY THE CONDITIONS ESTABLISHED BY
THE COURT.
The FCR’s Motion does not disclose or explain the above inter-class or intra-class
conflicts, yet contemplates that these conflicts will arise, a clear violation of Bankruptcy Rule
2014. The duty to disclose conflicts of interest under Bankruptcy Rule 2014 is “sacrosanct.” See,
e.g., In re Leslie Fay Cos., 175 B.R. 525, 533 (Bankr. S.D.N.Y. 1994); see generally 9 Collier on
Bankruptcy ¶ 2014.03 (15th ed. 2004). Disclosure “goes to the heart of the integrity of the
bankruptcy system.” In re Universal Bldg. Prod., 486 B.R. 650, 663 (Bankr. D. Del. 2010)
(failure of prospective counsel for unsecured creditors committee to provide complete and
accurate disclosure at the outset of their connections with creditors warranted denial of
committee’s applications); In re B.E.S. Concrete Prods., Inc., 93 B.R. 228, 236–38
(Bankr.E.D.Cal.1988) (disqualifying special counsel who failed to disclose that it represented co-
defendants in litigation it was handling for debtor). Timely and complete disclosure supports the
Bankruptcy Court’s obligation “to root out impermissible conflicts of interest’ under Bankruptcy
Code §§ 327(a) and 328(c).” In re eToys, Inc., 331 B.R. 176, 189–90 (Bankr. D. Del. 2005).
“The scope of disclosure required under Rule 2014 is much broader than the issue of conflicts
and disqualification.” In re C&C Demo, Inc., 273 B.R. 502, 507 (Bankr. E.D. Tex. 2001)
19
(citation omitted).40 Failure – even a de minimis failure – to disclose all actual or potential
conflicts is independent grounds for disqualification of the professional.41
None of the few cases on which the FCR relies in its briefing involve the “unique” issues
presented in this case. Debtors do not even attempt to address these unique conflicts of interest,
another violation of disclosure requirements.
Further, the FCR’s proposed order contemplates Gilbert LLP’s hiring “contract
attorneys” to provide additional services.42 No disclosures have been provided on this additional
counsel that will be advising the FCR in addition to Gilbert LLP. The FCR provides no
explanation for why additional counsel is needed. Nor has Gilbert LLP disclosed who these
contract attorneys will be, nor explained why Gilbert LLP must hire additional attorneys to
represent the FCR. This goes against the FCR’s assertion that Gilbert LLP’s work will not add
costs to the estate. It also violates a primary disclosure tenet for retaining professionals.
V. JOINT RETENTION WILL NOT SAVE THE ESTATE COSTS, AND IN ANY EVENT, THE
RISKS ARISING OUT OF THE INTER-CLASS AND INTRA-CLASS CONFLICTS OUTWEIGH
ANY MINOR ECONOMIC BENEFITS.
What the FCR describes as “duplicative” billing is in actuality a crucial safety mechanism
through which the TCC and FCR—which have adverse interests—can check and balance each
40
See also In re Park-Helena Corp., 63 F.3d 877, 882 (9th Cir. 1995) (even if no conflict of interests
existed, failure to describe in detail circumstances of the payment of a retainer violated disclosure
requirements of Rule 2014)(citation omitted); In re Filene’s Basement, Inc., 239 B.R. 845, 849
(Bankr. D. Mass. 1999) (“It has been held that the [disclosure] requirements of [Fed.R.Bankr.P. 2014]
transcend those of § 327(a), as they mandate disclosure of all connections with the named parties,
rather than being limited to those which deal with disinterestedness.”) (citation omitted).
41
See In re Envirodyne Indus., Inc., 150 B.R. 1008, 1021 (Bankr. N.D. Ill. 1993) (“Failure to abide by
the disclosure requirements is enough to disqualify a professional and deny compensation, regardless
of whether the undisclosed connections were material or de minimis.”) (citations omitted); In re EWC,
Inc., 138 B.R. 276, 280 (Bankr. W.D. Okla. 1992) (“Violation of the disclosure rules alone is enough
to disqualify a professional and deny compensation, regardless of whether the undisclosed
connections or fee arrangements were materially adverse to the interests of the estate or were de
minimis. . . .compliance with these requirements is necessary to maintain the integrity of the
bankruptcy system.”).
42
FCR’s Motion at Dkt. 942-2, Proposed Order.
20
other and reduce unnecessary expenses for the estate. The term “duplication” is better understood
as “protection” against inflated payment of estate proceeds to undeserving tort claimants. When
the FCR discusses removing duplication, it in effect means removing a key protection at the
expense of future claimants, Cyprus Historical Excess Insurers, and, ultimately, the Estate.
Moreover, Young Conaway’s initial declaration in this case, filed to represent the FCR in
this matter, stated that no other representatives would be necessary and would indeed be
duplicative as Young Conaway has already become familiar with the “insurance assets”:
The retention of a law firm other than Young Conaway as counsel to the Future
Claimants’ Representative would be inefficient and require the Debtors’ estates to
incur additional costs as the law firm would have to perform duplicative work to
learn about and become familiar with, inter alia, the Debtors, their corporate
history, financial posture, talc-related liabilities, and insurance assets.43
Indeed, Young Conaway has insurance expertise—as it also stated in the same
declaration—as a result of its “substantial experience in bankruptcy cases affecting the rights of
asbestos and other mass-tort claimants” and its representation of insurance companies.44 And
James Patton averred that he had “more than 30 years of experience with mass tort litigation
(including asbestos litigation), bankruptcies, and settlement trusts.”45 As Young Conaway itself
argued that there is no need for additional counsel for the FCR, Gilbert LLP’s co-retention would
be duplicative and unnecessarily costly to the Estate. But one of Gilbert LLP’s most recent
Applications for Compensation reveals that Gilbert LLP is “[a]nalyz[ing] privilege protection for
pre-petition communications with Future Claimants’ Representative.”46 We are concerned that
the primary purpose behind this co-retention is to protect these communications that Gilbert LLP
denied occurred.
43
Dkt. 101-2, Harron Declaration in support of Retaining Young Conaway as counsel to the FCR, at ¶4.
44
Id. at ¶9.
45
Dkt. 100-3, Declaration of James Patton, at ¶3.
46
Id.
21
That the FCR’s proposed order also contemplates Gilbert LLP’s hiring “contract
attorneys” to provide additional services, which goes against their argument that retaining
Gilbert LLP will reduce costs for the Estate.47 Neither the FCR nor Gilbert LLP provide any
explanation for why additional counsel is needed. We do not know who these contract attorneys
will be, their billable rates, nor why Gilbert LLP must hire additional attorneys to represent the
FCR. These contract attorneys will add costs to the Estate, but no explanation has been provided
on why they are necessary or who they are.
Finally, at rates up to $1,500 per hour for Gilbert partners, Gilbert LLP is among a handful
of the most expensive counsel in the country. That is well above the top-of-market fees paid in
the nation’s most expensive legal markets, such as New York, Los Angeles, and Washington,
D.C.48
CONCLUSION
For the foregoing reasons, Cyprus Historical Excess Insurers request that the Court deny
the FCR’s Motion.
47
FCR’s Motion at Dkt. 942-2, Proposed Order.
48
See National Law Journal Billing Survey for 2017 at
https://www.law.com/nationallawjournal/2018/05/17/hourly-rate-gap-widens-as-top-billers-leave-
others-behind/?slreturn=20190413172630 and for 2014 at
https://www.law.com/nationallawjournal/almID/1202636785489/
22
Dated: September 3, 2019 Respectfully Submitted,
By: /s/ Stamatios Stamoulis

Stamatios Stamoulis (#4606)

Telephone: +1 302 999 1540
Facsimile: +1 302 762 1688
and
O’MELVENY & MYERS LLP

Times Square Tower
7 Times Square
New York, New York 10036-6537
Telephone: +1 212 326 2000
Facsimile: +1 212 326 2061
Tancred Schiavoni (pro hac vice)

tschiavoni@omm.com
Janine Panchok-Berry (pro hac vice)
jpanchok-berry@omm.com
Counsel for Columbia Casualty Company,

Continental Casualty Company, the
Continental Insurance Company, as successor
to CNA Casualty of California and as
successor in interest to certain insurance
policies issued by Harbor Insurance Company,
Lamorak Insurance Company (formerly known
as OneBeacon America Insurance Company),
as successor to Employers’ Surplus Lines
Insurance Company, Stonewall Insurance
Company (now known as Berkshire Hathaway
Specialty Insurance Company), National
Union Fire Insurance Company of Pittsburgh
PA, and Lexington Insurance Company to the
extent that they issued policies to Cyprus
Mines Corporation prior to 1981.
23
CERTIFICATE OF SERVICE
I, Stamatios Stamoulis, certify that I am not less than 18 years of age, and that service of
the foregoing CYPRUS HISTORICAL EXCESS INSURERS’ OBJECTION TO THE
FUTURE CLAIMANTS’ REPRESENTATIVE APPLICATION TO CO-RETAIN
GILBERT LLP AS SPECIAL INSURANCE COUNSEL WITH THE OFFICIAL
COMMITTEE OF TORT CLAIMANTS [DKT. 942] was caused to be made on September 3,
2019, in the manner indicated upon the entities identified on the attached service list and the
parties identified below.
Dated: September 3, 2019 Respectfully Submitted,

By: /s/ Stamatios Stamoulis
Stamatios Stamoulis (#4606)

Telephone: +1 302 999 1540
Facsimile: +1 302 762 1688
24
Via Hand-Delivery
Sullivan Hazeltine Allinson LLC

William D. Sullivan
901 North Market Street, Suite 1300
Wilmington, DE 19801
Via First Class Mail
Allianz Life
Attn: Legal Department
780 9th Ave.
New York, NY 10019
Travelers
One Tower Square
Hartford, CT 06183
AIG Direct
9640 Granite Ridge Drive,
Suite 200
San Diego, CA 92123
AIU Insurance Co.

175 Water Street
24th Floor
New York, NY 10038
Central National Insurance Company of Omaha

11128 John Galt Blvd # 450
Omaha, NE 68137
25
Kazan, McClain, Satterley & Greenwood

Steven Kazan
Denyse Clancy
55 Harrison Street, Suite 400
Oakland, CA 94607
Levy Konigsberg LLP

Moshe Maimon
Brendan Little
800 Third Avenue, 11th Floor
New York, NY 10022
Robert Dehney
Gregory Wekheiser
Matthew Talmo
Morris Nichols Arsht & Tunnell LLP
1201 North Market Street
P.O. Box 1347
Wilmington, DE 19899-1347
Paul Heath
Matthew Moran
Jordan Leu
Katherine Grissel
Vinson & Elkins LLP
Trammell Crow Center
2001 Ross Avenue, Suite 3900
Dallas, TX 75201-2975
Via First Class Mail and Email

Squire Patton Boggs
Paul Kalish
2550 M Street NW
Washington, DC 20037
Paul.kalish@squirepb.com
26
Sara Thorpe
Matthew Lovell
Nicolaides Fink Thorpe Michaelides
Sullivan LLP
101 Montgomery
Suite 2300
San Francisco, CA 94104
sthorpe@nicolaidesllp.com
mlovell@nicolaisesllp.com
Via Email
John.conway@mclolaw.com
OMM_US:77152995.2
27

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Case 19-10289-LSS Doc 991 Filed 09/03/19 Page 1 of 31

IN THE UNITED STATES BANKRUPTCY COURT FOR THE

CYPRUS HISTORICAL EXCESS INSURERS’

STAMOULIS & WEINBLATT LLC

O’MELVENY & MYERS LLP

Counsel for Cyprus Historical Excess Insurers

Arkansas Co., Inc. v. Benenson & Scher, P.A.,

Atasi Corp. v. Seagate Technology,

Decora Inc. v. DW Wallcovering, Inc.,

Dewey v. Volkswagen Aktiengesellschaft,

EZ Paintr Corp. v. Padco, Inc.,

Georgine v. Amchem Prod., Inc.,

In re Busy Beaver Bldg. Centers, Inc.,

In re Cmty. Bank of N. Virginia Mortg. Lending Practices Litig.,

In re Cmty. Bank of N. Virginia,

In re Leslie Controls, Inc.,

In re Nat'l Football League Players Concussion Injury Litig.,

In re Pac. Sunwear of California, Inc.,

In re Target Corp. Customer Data Sec. Breach Litig.,

Mitchell v. Metro. Life Ins. Co.,

Ortiz v. Fibreboard Corp., 527

Papanicolaou v. Chase Manhattan Bank,

United States ex rel. Bahsen v. Bos. Sci. Neuromodulation Corp.,

The Future Claimants’ Representative’s Motion to Co-Retain Gilbert LLP as Special

Avoiding conflicts of interest is particularly important to the Cyprus Historical Excess

and the Estate are also aligned or should be.

understood as “protection” against inflated payment of Estate proceeds to undeserving tort

will actually increase costs to the estate.

since before this bankruptcy matter was filed.

The Current and Future Tort Claimants have adverse interests

the above three products.

The Current and Future Tort Claimants have adverse interests

differing exposure levels for the public.

The Current and Future Tort Claimants have adverse interests

Gilbert LLP has represented the tort claimants since pre-petition.

privilege protections over those communications undoubtedly as a result of potential conflicts of

LLP is “[a]nalyz[ing] privilege protection for pre-petition communications with Future

Gilbert LLP will be representing adverse parties

• meeting with the TCC and Debtors regarding plan negotiations,10

• analyzing insurance coverage issued in different policy periods, covering different

groups of claimants, issued to different insured parties, including Cyprus Mines,

Amoco, Standard Oil, and Debtors,11

• reviewing tort claimants’ allegations for the purpose of determining insurance

and other parties,13

• valuing claims asserted by future tort claimants,14

The FCR is prevented from asserting extra-contractual

As a result of Young Conaway’s waiver of conflicts related to certain Cyprus Historical

The FCR’s Motion ignores clear conflicts of interest

for different estate assets, as this Court recognized:

The FCR’s Motion excludes

exploitation. Mindful of the significance of its responsibilities, a bankruptcy court must

I. THE FCR AND TCC HAVE INHERENTLY ADVERSE INTERESTS THAT

class action because:

under Rule 23(c)(4)(B), with separate representation to eliminate conflicting interests of

compensation, creating an inequitable outcome).

II. INTRA-CLASS CONFLICTS OF INTEREST AMONG SUBCLASSES WITHIN THE

different estate assets, as this Court recognized:

not be covered under some of the insurance policies.”32

difference in priority or (ii) certify subclasses.

2016 WL 4250681, at *11 (Bankr. D. Del. Aug. 8, 2016).

other cases, support this basic requirement.

lawyer's responsibilities to another client, a former client, or a third person or by a personal

interest of the lawyer.” Id.