S T A T E O F N E W Y O R K
________________________________________________________________________
6861
2009-2010 Regular Sessions
I N A S S E M B L Y
March 13, 2009
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Introduced by M. of A. SCOZZAFAVA -- read once and referred to the
Committee on Corporations, Authorities and Commissions
AN ACT to amend the business corporation law and the civil practice law
and rules, in relation to limitations on asbestos-related liabilities
relating to certain mergers and consolidations
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The business corporation law is amended by adding a new
section 906-a to read as follows:
S 906-A. LIMITATIONS ON ASBESTOS-RELATED LIABILITIES RELATING TO CERTAIN
MERGERS OR CONSOLIDATIONS.
(A) LIMITATION ON SUCCESSOR ASBESTOS-RELATED LIABILITIES.
(1) EXCEPT AS FURTHER LIMITED IN SUBPARAGRAPH TWO OF THIS PARAGRAPH,
THE CUMULATIVE SUCCESSOR ASBESTOS-RELATED LIABILITIES OF A DOMESTIC
CORPORATION THAT WAS INCORPORATED IN THIS STATE PRIOR TO MAY FIRST, TWO
THOUSAND NINE, SHALL BE LIMITED TO THE FAIR MARKET VALUE OF THE TOTAL
ASSETS OF THE TRANSFEROR DETERMINED AS OF THE TIME OF THE MERGER OR
CONSOLIDATION AND SUCH CORPORATION SHALL HAVE NO RESPONSIBILITY FOR
SUCCESSOR ASBESTOS-RELATED LIABILITIES IN EXCESS OF SUCH LIMITATION.
(2) IF THE TRANSFEROR HAD ASSUMED OR INCURRED SUCCESSOR ASBESTOS-RE-
LATED LIABILITIES IN CONNECTION WITH A PRIOR MERGER OR CONSOLIDATION
WITH A PRIOR TRANSFEROR, THEN THE FAIR MARKET VALUE OF THE TOTAL ASSETS
OF THE PRIOR TRANSFEROR, DETERMINED AS OF THE TIME OF SUCH EARLIER MERG-
ER OR CONSOLIDATION, SHALL BE SUBSTITUTED FOR THE LIMITATION SET FORTH
IN SUBPARAGRAPH ONE OF THIS PARAGRAPH FOR PURPOSES OF DETERMINING THE
LIMITATION OF LIABILITY OF A DOMESTIC CORPORATION.
(B) LIMITATION ON TOTAL ASSETS AVAILABLE TO SATISFY SUCCESSOR ASBES-
TOS-RELATED LIABILITIES.
(1) EXCEPT AS FURTHER LIMITED IN SUBPARAGRAPH TWO OF THIS PARAGRAPH,
THE ASSETS OF A DOMESTIC CORPORATION THAT WAS INCORPORATED IN THIS STATE
PRIOR TO MAY FIRST, TWO THOUSAND NINE, SHALL BE EXEMPT FROM RESTRAINT,
ATTACHMENT OR EXECUTION ON JUDGMENTS RELATED TO CLAIMS FOR SUCCESSOR
ASBESTOS-RELATED LIABILITIES IF THE CUMULATIVE AMOUNTS WHICH, AFTER THE
TIME OF THE MERGER OR CONSOLIDATION AS TO WHICH THE FAIR MARKET VALUE OF
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08529-01-9
A. 6861 2
TOTAL ASSETS IS DETERMINED FOR PURPOSES OF THIS PARAGRAPH AND PARAGRAPH
(A) OF THIS SECTION, ARE PAID OR COMMITTED TO BE PAID BY OR ON BEHALF OF
THE CORPORATION, OR BY OR ON BEHALF OF A TRANSFEROR, IN CONNECTION WITH
SETTLEMENTS, JUDGMENTS OR OTHER DISCHARGES OF CLAIMS OF ASBESTOS-RELATED
LIABILITIES, EXCEED THE FAIR MARKET VALUE OF THE TOTAL ASSETS OF THE
TRANSFEROR, DETERMINED AS OF THE TIME OF THE MERGER OR CONSOLIDATION.
(2) IF THE TRANSFEROR HAD ASSUMED OR INCURRED SUCCESSOR ASBESTOS-RE-
LATED LIABILITIES IN CONNECTION WITH A PRIOR MERGER OR CONSOLIDATION
WITH A PRIOR TRANSFEROR, THEN THE FAIR MARKET VALUE OF THE TOTAL ASSETS
OF THE PRIOR TRANSFEROR, DETERMINED AS OF THE TIME OF SUCH EARLIER MERG-
ER OR CONSOLIDATION, SHALL BE SUBSTITUTED FOR THE LIMITATION SET FORTH
IN SUBPARAGRAPH ONE OF THIS PARAGRAPH FOR PURPOSES OF DETERMINING THE
EXTENT OF THE EXEMPTION OF THE ASSETS OF A DOMESTIC CORPORATION.
(C) FAIR MARKET VALUE OF TOTAL ASSETS.
(1) A DOMESTIC CORPORATION MAY ESTABLISH THE FAIR MARKET VALUE OF
TOTAL ASSETS THROUGH ANY METHOD REASONABLE UNDER THE CIRCUMSTANCES,
INCLUDING BY REFERENCE TO THE GOING CONCERN VALUE OF SUCH ASSETS OR TO
THE PURCHASE PRICE ATTRIBUTABLE TO OR PAID FOR SUCH ASSETS IN AN ARM'S
LENGTH TRANSACTION, OR, IN THE ABSENCE OF OTHER READILY AVAILABLE INFOR-
MATION FROM WHICH FAIR MARKET VALUE CAN BE DETERMINED, BY REFERENCE TO
THE VALUE OF SUCH ASSETS RECORDED ON A BALANCE SHEET. TOTAL ASSETS SHALL
INCLUDE INTANGIBLE ASSETS. A SHOWING BY THE DOMESTIC CORPORATION OF A
REASONABLE DETERMINATION OF THE FAIR MARKET VALUE OF TOTAL ASSETS SHALL
BE PRIMA FACIE EVIDENCE OF THEIR FAIR MARKET VALUE.
(2) ONCE A REASONABLE DETERMINATION OF THE FAIR MARKET VALUE OF TOTAL
ASSETS HAS BEEN THUS ESTABLISHED BY A DOMESTIC CORPORATION, A CLAIMANT
DISPUTING THAT DETERMINATION OF VALUE SHALL THEN HAVE THE BURDEN OF
ESTABLISHING A DIFFERENT FAIR MARKET VALUE OF SUCH ASSETS.
(3) FOR THE PURPOSE OF ADJUSTING THE LIMITATIONS SET FORTH IN PARA-
GRAPHS (A) AND (B) OF THIS SECTION TO ACCOUNT FOR THE PASSAGE OF TIME,
THE FAIR MARKET VALUE OF TOTAL ASSETS AT THE TIME OF A MERGER OR CONSOL-
IDATION SHALL BE INCREASED ANNUALLY, UNTIL THE EARLIER OF:
(I) THE DATE OF THE SETTLEMENT, JUDGMENT OR OTHER DISCHARGE TO WHICH
THE LIMITATIONS IN PARAGRAPH (A) OR (B) OF THIS SECTION ARE BEING
APPLIED; OR
(II) THE DATE ON WHICH SUCH ADJUSTED FAIR MARKET VALUE IS FIRST
EXCEEDED BY THE CUMULATIVE AMOUNTS PAID OR COMMITTED TO BE PAID BY OR ON
BEHALF OF THE CORPORATION, OR BY OR ON BEHALF OF A TRANSFEROR, AFTER THE
TIME OF THE MERGER OR CONSOLIDATION AS TO WHICH THE FAIR MARKET VALUE OF
TOTAL ASSETS IS DETERMINED FOR PURPOSES OF PARAGRAPHS (A) AND (B) OF
THIS SECTION, IN CONNECTION WITH SETTLEMENTS, JUDGMENTS OR OTHER
DISCHARGES OF THE SUCCESSOR ASBESTOS-RELATED LIABILITIES, AT THE RATE
EQUAL TO THE PRIME RATE AS LISTED IN THE FIRST EDITION OF THE WALL
STREET JOURNAL PUBLISHED FOR EACH CALENDAR YEAR SINCE SUCH MERGER OR
CONSOLIDATION, PLUS ONE PERCENT NOT COMPOUNDED.
(D) APPLICATION.
(1) THE LIMITATIONS SET FORTH IN PARAGRAPHS (A) AND (B) OF THIS
SECTION SHALL APPLY TO MERGERS OR CONSOLIDATIONS EFFECTED UNDER THE LAWS
OF THIS STATE OR ANOTHER JURISDICTION CONSUMMATED PRIOR TO MAY FIRST,
TWO THOUSAND SEVEN.
(2) THE LIMITATIONS SET FORTH IN PARAGRAPHS (A) AND (B) OF THIS
SECTION SHALL APPLY TO ALL ASBESTOS CLAIMS, INCLUDING EXISTING ASBESTOS
CLAIMS, AND ALL LITIGATION, INCLUDING EXISTING LITIGATION, AND SHALL
APPLY TO SUCCESSORS OF A DOMESTIC CORPORATION TO WHICH THIS SECTION
APPLIES.
A. 6861 3
(3) THE LIMITATIONS SET FORTH IN PARAGRAPHS (A) AND (B) OF THIS
SECTION SHALL NOT APPLY TO WORKERS' COMPENSATION BENEFITS PAID BY OR ON
BEHALF OF AN EMPLOYER TO AN EMPLOYEE.
(4) THE LIMITATIONS SET FORTH IN PARAGRAPHS (A) AND (B) OF THIS
SECTION SHALL NOT APPLY TO ANY CLAIM AGAINST A DOMESTIC CORPORATION THAT
DOES NOT CONSTITUTE A SUCCESSOR ASBESTOS-RELATED LIABILITY.
(5) THE LIMITATIONS SET FORTH IN PARAGRAPHS (A) AND (B) OF THIS
SECTION SHALL NOT APPLY TO ANY OBLIGATION ARISING UNDER THE NATIONAL
LABOR RELATIONS ACT (49 STAT. 449, 29 U.S.C. S 151 ET SEQ.), OR UNDER
ANY COLLECTIVE BARGAINING AGREEMENT.
(E) DEFINITIONS. AS USED IN THIS SECTION, THE FOLLOWING WORDS AND
PHRASES SHALL HAVE THE FOLLOWING MEANINGS:
(1) "ASBESTOS CLAIM" SHALL MEAN ANY CLAIM, WHEREVER OR WHENEVER MADE,
FOR DAMAGES, LOSSES, INDEMNIFICATION, CONTRIBUTION OR OTHER RELIEF,
ARISING OUT OF, BASED ON OR IN ANY WAY RELATED TO ASBESTOS, INCLUDING
PROPERTY DAMAGE CAUSED BY THE INSTALLATION, PRESENCE OR REMOVAL OF
ASBESTOS, THE HEALTH EFFECTS OF EXPOSURE TO ASBESTOS, INCLUDING ANY
CLAIM FOR PERSONAL INJURY, DEATH, MENTAL OR EMOTIONAL INJURY, RISK OF
DISEASE OR OTHER INJURY OR THE COSTS OF MEDICAL MONITORING OR SURVEIL-
LANCE. THE TERM SHALL ALSO INCLUDE ANY CLAIM MADE BY OR ON BEHALF OF ANY
PERSON EXPOSED TO ASBESTOS OR ANY REPRESENTATIVE, SPOUSE, PARENT, CHILD
OR OTHER RELATIVE OF ANY SUCH PERSON.
(2) "SUCCESSOR ASBESTOS-RELATED LIABILITIES" SHALL MEAN ANY LIABIL-
ITIES, WHETHER KNOWN OR UNKNOWN, ASSERTED OR UNASSERTED, ABSOLUTE OR
CONTINGENT, ACCRUED OR UNACCRUED, LIQUIDATED OR UNLIQUIDATED OR DUE OR
TO BECOME DUE, RELATED IN ANY WAY TO ASBESTOS CLAIMS, THAT WERE ASSUMED
OR INCURRED BY A DOMESTIC CORPORATION OR FOREIGN CORPORATION AS A RESULT
OF OR IN CONNECTION WITH A MERGER OR CONSOLIDATION, OR THE PLAN OF MERG-
ER OR CONSOLIDATION RELATED THERETO, WITH OR INTO ANOTHER DOMESTIC
CORPORATION OR FOREIGN CORPORATION EFFECTED UNDER THE LAWS OF THIS STATE
OR ANOTHER JURISDICTION OR WHICH ARE RELATED IN ANY WAY TO ASBESTOS
CLAIMS BASED ON THE EXERCISE OF CONTROL OR THE OWNERSHIP OF STOCK OF
SUCH CORPORATION PRIOR TO SUCH MERGER OR CONSOLIDATION. THE TERM SHALL
ALSO INCLUDE LIABILITIES WHICH, AFTER THE TIME OF THE MERGER OR CONSOL-
IDATION AS TO WHICH THE FAIR MARKET VALUE OF TOTAL ASSETS IS DETERMINED
FOR PURPOSES OF PARAGRAPHS (A) AND (B) OF THIS SECTION, WERE OR ARE PAID
OR OTHERWISE DISCHARGED, OR COMMITTED TO BE PAID OR OTHERWISE
DISCHARGED, BY OR ON BEHALF OF THE CORPORATION, OR BY OR ON BEHALF OF A
TRANSFEROR, IN CONNECTION WITH SETTLEMENTS, JUDGEMENTS OR OTHER
DISCHARGES IN THIS STATE OR ANOTHER JURISDICTION.
(3) "TRANSFEROR" SHALL MEAN A DOMESTIC CORPORATION OR FOREIGN CORPO-
RATION FROM WHICH SUCCESSOR ASBESTOS-RELATED LIABILITIES ARE ASSUMED OR
INCURRED.
S 2. The civil practice law and rules is amended by adding a new
section 214-f to read as follows:
S 214-F. TWO YEAR LIMITATION; EXPOSURE TO ASBESTOS. THE FOLLOWING
ACTIONS AND PROCEEDINGS SHALL BE COMMENCED WITHIN TWO YEARS:
AN ACTION TO RECOVER DAMAGES FOR INJURY TO A PERSON OR FOR THE DEATH
OF A PERSON CAUSED BY EXPOSURE TO ASBESTOS SHALL BE COMMENCED WITHIN TWO
YEARS FROM THE DATE ON WHICH THE PERSON IS INFORMED BY A LICENSED PHYSI-
CIAN THAT THE PERSON HAS BEEN INJURED BY SUCH EXPOSURE, OR UPON THE DATE
ON WHICH THE PERSON KNEW, OR IN THE EXERCISE OF REASONABLE DILIGENCE
SHOULD HAVE KNOWN, THAT THE PERSON HAD AN INJURY WHICH WAS CAUSED BY
SUCH EXPOSURE, WHICHEVER DATE OCCURS FIRST.
S 3. This act shall take effect on the one hundred twentieth day after
it shall have become a law.