Chancery Court: Receiver May Be Necessary to Resolve Decades-Old Asbestos Claims
December 7, 2011
Publication| Corporate Transactions| Corporate & Chancery Litigation
In its Nov. 9 decision in In re Krafft-Murphy Company, the Delaware Court of Chancery addressed several important issues that a board of directors and its legal advisers should consider in connection with the dissolution of a corporation. Ruling on a motion to dismiss for insufficiency of service of process and failure to state a claim, the Court of Chancery held that service of process could be effected upon Krafft-Murphy Company Inc., a dissolved Delaware corporation, and that sufficient facts had been alleged that conceivably could show that the appointment of a receiver was necessary to litigate asbestos-based personal injury claims initiated more than 10 years after the corporation had been dissolved.
When it was an operating corporation, Krafft-Murphy was engaged in the business of plastering and spraying insulation in homes and buildings in several Mid-Atlantic states. Krafft-Murphy’s products contained asbestos, and, as a result, it found itself the target of hundreds of personal injury lawsuits filed over a 20-year period beginning in the early 1990s. Krafft-Murphy ceased operations in 1991 and formally dissolved by filing a certificate of dissolution with the Delaware secretary of state on July 30, 1999.