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Cases / Liability shifting (spin-offs, bankruptcy, closure bonds) · United States · 2017

Georgia-Pacific, Bestwall and the Texas two-step

Nature's voice · report
No measurement of the harm done to me here is on record.
Did nature suffer? Not measured.
Not on record
  • The record does not name which of my species, waters, soils or forests were harmed.
What the record lacks: 1 none on record · 3 insufficient · 1 not measured · 1 disputed See the gaps

In 2017 Georgia-Pacific, a Koch-owned company, moved its asbestos liabilities into a new unit, Bestwall, which then filed for bankruptcy with about 64,000 cases pending. The proceeding had run more than nine years by 2026.

about 64,000Asbestos cases pending when Bestwall filed
As recorded in the project's evidence table; North Carolina, 2017–2026.

Status As of 2026: the Bestwall bankruptcy had run more than nine years; the sources reviewed give no resolution.

What?
Georgia-Pacific assigned its asbestos liabilities to Bestwall, which filed for bankruptcy while about 64,000 cases were pending.
Where?
North Carolina, United States.
When?
2017 to 2026.
Who?
Gained
  • Koch (owner of Georgia-Pacific) — Plaintiffs' lawyers allege more than $7 billion was transferred to Koch during the proceeding; not a court finding.
Lost
  • Asbestos claimants — Their cases remained pending for more than nine years; one claimant died while waiting.
Harmed
None on record
Why?
the sources reviewed does not state the parties' own reasons for the structure.
How?
Under the 'Texas two-step', a company divides under Texas law, assigns the litigation burden to a new low-asset company, and that company files for bankruptcy.
6 of 6 questions answered from the record

What happened

The record, in order.

In 2017 Georgia-Pacific, which is owned by Koch, transferred its asbestos liabilities to a unit called Bestwall. Bestwall then filed for bankruptcy while about 64,000 cases were pending against it. The proceeding is recorded in North Carolina and covers the years 2017 to 2026.

The project's glossary describes the 'Texas two-step' as a division of a company under Texas 'divisional merger' law, in which the litigation burden is assigned to a new company with few assets and that company files for bankruptcy. The record places Bestwall among the cases that used this method.

By 2026 the proceeding had run for more than nine years. One claimant, Ed Chapman, died while waiting. Plaintiffs' lawyers alleged that Georgia-Pacific transferred more than $7 billion to its owner Koch over this period; the sources reviewed give that this is an allegation and not a court finding.

For comparison, the record notes that the US Court of Appeals for the Third Circuit dismissed the Johnson & Johnson subsidiary LTL Management's bankruptcy on 30 January 2023, finding no financial distress given a funding commitment of at least $61.5 billion and more than 38,000 claims.

  1. 2017Georgia-Pacific assigns its asbestos liabilities to Bestwall; Bestwall files for bankruptcy with about 64,000 cases pending
  2. 2023Third Circuit dismisses the bankruptcy of Johnson & Johnson's LTL Management (30 January), a comparable structure
  3. 2026Bestwall proceeding has run more than nine years

What was said

Claims, in the words of those who made them.

Where accounts differ

Each party's account, side by side, with its source. The record does not settle these points; it shows them.

Did Georgia-Pacific transfer more than $7 billion to Koch during the Bestwall proceeding?
Communities and civil society
Plaintiffs' lawyers

Alleged that Georgia-Pacific transferred more than $7 billion to its owner Koch over the period; the sources reviewed notes this is not a court finding.

How it looked

What was shown, beside what was recorded.

Shown

    Recorded

    • About 64,000 cases were pending when Bestwall filed for bankruptcy (North Carolina, 2017–2026).
    • The proceeding had run more than nine years; a claimant, Ed Chapman, died while waiting.
    • Plaintiffs' lawyers allege that Georgia-Pacific transferred more than $7 billion to Koch over the period; this is not a court finding.

    In court and with insurers

    Every proceeding and every insurer decision on record.

    Lawsuits and rulings

    1. 2017–Ongoing
      Bestwall bankruptcy (asbestos claims)
      Bankruptcy proceeding, North Carolina · Civil · Asbestos claimants (about 64,000 cases pending at filing) → Bestwall (Georgia-Pacific unit)

      Bestwall filed for bankruptcy with about 64,000 cases pending after Georgia-Pacific assigned its asbestos liabilities to it in 2017. The proceeding had run more than nine years by 2026.

    Insurers

    No insurer decision on record.

    What nature saw

    Outcomes measured on the ground, and nature's note.

    Nature's report opens this page. Below: further outcomes measured on the ground.

    Harm to nature in this record
    None recorded
    the sources reviewed concerns liability for asbestos claims; it records no ecological harm.

    What we don't know

    Undisclosed, unproven, untried: recorded as data.
    Case pending / contested

    Nature

    • Not measured Harm to nature: The record holds no measurement of harm to nature.

    Figures

    • Insufficient Dividend to owner: Described as Georgia-Pacific's dividend to Koch in one year; year not stated; unverified.

    Accounts

    • Disputed Did Georgia-Pacific transfer more than $7 billion to Koch during the Bestwall proceeding?

    Record

    • Insufficient Reported but not independently verified: that the US Supreme Court declined on 1 June 2026 to hear the claimants' petition. the sources reviewed's confidence label for this item is mixed.
    • Insufficient Reported but not independently verified: a figure of $1.84 billion described as Georgia-Pacific's dividend to Koch in a single year. the sources reviewed does not state which year.
    • None on record The allegation that more than $7 billion went to Koch is not a court finding.

    Did the harm stop?

    Not established in the sources reviewed; the proceeding was unresolved after more than nine years.

    Who paid?

    the sources reviewed give no payments to claimants. It records claimants waiting, and one claimant dying during the proceeding.

    Sources

    Voices on record: — Company or project— Government and regulators— Courts— Press and investigations— Communities and civil society— Researchers

    Connected cases

    Related matters, and cases linked to this one through the same organisations, with the role each played in both.
    Terms used on this page

    Bonds and banking

    Liquidation, insolvency, bankruptcy
    Legal processes that apply when a company cannot pay its debts; its assets are sold and claims against it may go unpaid.
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