The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge
Defendant Samuel Heyman ("Heyman") has moved pursuant to
28 U.S.C. § 1412, or in the alternative, pursuant to 28 U.S.C. § 1404(a),
to transfer this action to the District of New Jersey. For the reasons
set forth below, the motion is denied.
Plaintiff, the Official Committee of Asbestos Claimants of G-I
Holdings, Inc. (the "Committee"), is a creditors committee appointed by
the United States Trustee pursuant to 11 U.S.C. § 1102 (a). The
Committee is made up of persons who assert claims against G-I, as
successor to GAF Corporation ("GAF"), by reason of personal injuries or
wrongful death caused by asbestos-containing products.
Heyman is the former chairman and chief executive officer of GAF and is
a citizen of the State of New York.
Prior Proceedings and Background
The facts discussed herein are discussed in greater detail in
Official Committee of Asbestos Claimants of G-I Holdings, Inc. v.
Heyman, 01 Civ. 8539, 2003 WL 22790916 (S.D.N.Y. Nov. 25, 2003)
("Heyman II") and Official Committee of Asbestos Claimants
G-I Holdings, Inc. v. Heyman, 277 B.R. 20 (S.D.N.Y. 2002)
("Heyman I"), familiarity with which is presumed.
This action, brought pursuant to 11 U.S.C. § 544(b) and 550(a) of
the Bankruptcy Code, arises out of the Chapter 11 reorganization
proceeding of G-I Holdings, Inc. ("G-I") currently pending in the
District of New Jersey, seeks to set aside an allegedly fraudulent
transfer and to recover for breaches of fiduciary duty. G-I filed for
bankruptcy on January 5, 2001, as a result of a flood of personal injury
and wrongful death claims.
As of December 31, 1996, GAF was the top-tier holding company
in a corporate group that contained two principal operating businesses:
(1) ISP, a manufacturer of specialty chemicals and mineral products; and
(2) Building Materials Corporation of America ("BMCA"), a manufacturer of
roofing and building products. GAF was a privately held company at the
time. It later merged with G-I.
The transactions challenged in this action took place in January 1997,
when GAF owned 100% of a company named ISP Holding, Inc. ("ISPH"), which
in turn owned approximately 83.5% of the ISP stock. The remaining ISP
stock was publicly held.
With effect as of January 1, 1997, GAF distributed to GAF'S
shareholders, for no consideration, 100% of the capital stock of ISPH
(the transaction will be referred to as the "ISP Spin-off").
Heyman received approximately 96% of the shares, and the
minority shareholders of GAF received the remaining 4%. At ISP's closing
price on December 31, 1996, the stock that GAF disposed of in the
transfer was worth about $1 billion, $988,391,250 of which Heyman
received directly or indirectly.
Before G-I filed for bankruptcy, individual creditors filed three
different fraudulent transfer suits against Heyman in New York based on
the spin-off of ISP. Two of these, Nettles v. Heyman,
No. 00 Civ. 0035, filed January 3, 2000 and Stewart v. Heyman,
filed on December 26, 2000, were filed by asbestos claimants in the
Southern District of New York.*fn1 The third predecessor action, was
filed in the Supreme Court for the County of New York on September 18,
2000 by the Center for Claims Resolution, Inc. ("CCR"), a consortium of
asbestos defendants of which GAF was a former member. CCR v.
Heyman, Index No. 604002/2000 (Sup.Ct.N.Y. County).
Heyman moved to dismiss the Committee's complaint on December 13, 2001.
This Court denied the motion on April 8, 2002. See Heyman I.
The Legal Representative of Present and Future Holders of
Asbestos-Related Demands (the "Legal Representative")
was granted leave to intervene pursuant to Fed.R.Civ.P. 24 on
November 25, 2003. See Heyman II.
The Committee is simultaneously litigating another proceeding pending
before the Honorable William G. Bassler in the District of New Jersey
that also grows out of the G-I bankruptcy. In the action, styled G-I
Holdings, Inc. v. Bennett, Civ. No. 02-2626 (WGB) (D. N.J.) (filed
Feb. 7, 2001) (the "BMCA Action"), G-I seeks a declaratory judgment that
BMCA, its indirect subsidiary and sole operating company, has no
liability for asbestos claims under any theory of successor liability or
alter ego. Joined as ...