Published September 27, 2026
Asbestos claimants who have spent more than six years unable to pursue their lawsuits against building-products maker CertainTeed have taken their fight to the U.S. Supreme Court. In September 2026 they filed a petition for a writ of certiorari asking the justices to review the bankruptcy of DBMP LLC, the CertainTeed spinoff that holds the company's asbestos liabilities, and to rein in the corporate maneuver known as the "Texas Two-Step."
In 2019, CertainTeed used a Texas "divisional merger" to split itself in two. A new CertainTeed kept the operating business and most of the assets, while a new entity, DBMP, took on all of the asbestos-related liabilities. The new CertainTeed agreed to an uncapped funding arrangement to pay DBMP's asbestos claims and bankruptcy costs. DBMP then filed for Chapter 11 in the U.S. Bankruptcy Court for the Western District of North Carolina in January 2020, seeking to channel current and future claims into a trust under Section 524(g) of the Bankruptcy Code. While that case is pending, an automatic stay freezes lawsuits against it.
Two claimants, Herlihy and the estate of Bergrud, asked the courts to lift that stay so they could return to state court, arguing the bankruptcy was filed in bad faith because DBMP was never in financial distress. The bankruptcy and district courts refused. On February 11, 2026, a divided Fourth Circuit panel affirmed. The majority, in an opinion by Judge Paul Niemeyer, reasoned that granting relief would effectively undo the bankruptcy by sending thousands of claims back to state courts and undercutting equal treatment of claimants. Judge Robert King dissented sharply, writing that the circuit had become a "safe haven for ultra-wealthy corporations" seeking to escape asbestos liability.
The petition, first reported by Mealey's on September 22, frames the case as a question of protecting the bankruptcy system and claimants' constitutional right to seek redress in civil courts. It is not the only request of its kind this year: earlier in 2026, the Court was also asked to review the Bestwall two-step bankruptcy of Georgia-Pacific. The Supreme Court grants only a small share of petitions, so review is far from guaranteed, but if the justices take up the issue it could affect several two-step bankruptcies that have kept asbestos claims on hold for years.
A stalled bankruptcy against one company does not necessarily block every path to compensation. Many people with mesothelioma were exposed to products from multiple manufacturers, and dozens of asbestos trust funds and solvent defendants remain available. See Atumio's asbestos and mesothelioma case page for a free, no-obligation review, or start your case review directly.