Creditors of W.R. Grace, Owens Corning and USG learn why judge refuses to recuse

By Jeff Pines

Washington, Feb. 3 - Creditors of W.R. Grace & Co., Owens Corning and USG Corp. learned in a 105-page opinion why Judge Alfred Wolin refused to recuse himself from their asbestos-related bankruptcy cases.

Wolin acknowledged that the asbestos cases are unique and enormously complex.

But in no uncertain terms, Wolin said: "The allegations of the appearance of impropriety when measured against the record do not merit recusal."

Two creditors, Kensington International Ltd. and Springfield Associates, LLC, along with USG itself had argued they would not get a fair hearing because the judge and his advisors held discussions outside the courtroom with people who were and were not involved in the case. All three filed motions asking him to turn the case over to another judge.

The U.S. Court of Appeals for the Third Circuit left the recusal decision with Wolin, who chose not to recuse himself.

In motions, attorneys questioned the objectivity of Wolin's advisors, whether they are truly impartial, and whether they tried to influence him.

Three are former judges and one is a nationally respected professor, and some are involved in other asbestos cases.

They did not tell him how to rule, Wolin said. In fact, the judge said he can not recall any instance of an advisor pressing his view on him.

He called the attorneys' arguments "meritless."

As for the ex parte discussions that were held, the judge rejects them as a cause for recusal.

That out-of-court discussions were being held was well known - and they were needed in order to learn proprietary and sensitive information that otherwise might not come out in public.

In fact, "all parties were welcome," he said. Wolin notes that William Foote, USG's chief executive officer, the company's general counsel and two attorneys from a law firm representing USG attended one of these out-of-court discussions. The meeting lasted two and half hours.

Without these discussions, "in the court's opinion posturing and lack of candor would have been the order of the day."

According to Wolin's opinion, statistically 15 abestos claimants die a day. "They, together with other seriously ill asbestos claimants, deserve closure without delay.

If he recused himself, a solution would be postponed and cost tens of millions of dollars to the companies involved.

USG said Monday it plans to seek review of the decision in the Third Circuit Court of Appeals.

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