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The Johns-Manville Corporation was a pioneer in the use of Chapter 11 bankruptcy as a strategic defense against exposure to product liability lawsuits. Manville was a major supplier of insulation materials. Unfortunately, asbestos was one of Manville's main insulation products. Exposure to even small quantities of airborne asbestos particles can cause debilitating and often fatal lung disease. There is evidence that Manville knew of the link between its asbestos and lung disease as early as the 1930s. An appeals court judge even held that Manville had engaged in a conspiracy to hide that link. Not surprisingly, the industrial workers who had been exposed to asbestos began to file lawsuits in increasing numbers during the 1970s and 1980s.

In 1982, faced with this burgeoning potential liability, Manville ...

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