In re G-I Holdings Inc., No. 01-30135; U.S. Bankruptcy Court (DNJ); opinion by Gambardella, U.S.B.J.; filed May 17, 2012. DDS No. 42-6-6572 [27 pp.]

G-I Holdings and ACI Inc., its subsidiary, each filed a voluntary petition for relief under Chapter 11. G-I continued to operate its business as a debtor-in-possession. Claimant New York City Housing Authority (NYCHA) filed a proof of claim for asbestos property damage to housing complexes for the abatement of asbestos-containing materials allegedly manufactured, mined, distributed and sold by G-I or its predecessors in interest. The reorganized debtors filed an objection to the NYCHA claim, and the court issued its opinion granting in part and denying in part the debtors’ objection to the NYCHA claim (Dec. 14, 2010, opinion).

Before the court is NYCHA’s motion to correct a mistake in the court’s Dec. 14, 2010, opinion pursuant to Rule 60(a) and (b) of the Federal Rules of Civil Procedure.

NYCHA is asking the court to clarify its intent in stating that “the alleged asbestos- containing products that are the subject of the claim are non-friable asbestos-containing floor tiles (VAT).” NYCHA argues that this sentence of the opinion contains a factual mistake.

G-I argues that Rule 60(a) is inapplicable because the scope of the requested relief goes beyond the correction of a mechanical mistake or typographic error. G-I argues the plain meaning of the opinion and the subsequent order is that “this case is limited to a VAT case.”

Held: To the extent that NYCHA asks the court to clarify that NYCHA’s claims include all the product types specified in its proof of claim and supplemental submission, the motion to correct the mistake in the court’s Dec. 14, 2010, opinion is granted.

The conflicting interpretations of the parties do not arise from a single mechanical error but from parsing the language of the Dec. 14, 2010, opinion. It is not just one sentence in the background section that gives rise to G-I’s reading but references throughout the opinion to “VAT” as the subject of the NYCHA claim. Merely mechanically replacing “VAT” with “asbestos-containing materials” would not be a simple exchange of equivalent terms nor would it be the remedy requested by NYCHA. The court, therefore, finds Rule 60(a) is inapplicable; the court is being asked to clarify its opinion, not modify or change it.

The inquiry here is more properly determined under the court’s equitable powers, not Rule 60. The opinion did not decide whether NYCHA had supported its claim with respect to the different types of asbestos-containing materials. There is only one instance where the different types of materials are distinguished. Throughout the rest of the opinion, the court continued to use “VAT” as a reference to the asbestos-containing materials that are the subject of the NYCHA claim. Completely absent from the opinion is any explanation as to either the allowance or disallowance of claims based on the abatement of certain asbestos-containing materials as distinct from others.

The Dec. 14, 2010, opinion explicitly held that the debtors’ motion to disallow was premature as to restitution and indemnity claims without further development of the factual record and that NYCHA would be allowed a future opportunity to present proofs in support. To limit the subject asbestos-containing materials without some explanation or without allowing NYCHA that opportunity would create a reading of the opinion in which it contradicted itself.

The court did not intend to limit the subject of the NYCHA claim to VAT tiles to the exclusion of other asbestos-containing materials because to do so at this point would be premature. NYCHA will have an opportunity to present further proofs related to each type of asbestos-containing material included in its proof of claim and supplemental submission with respect to the issues of fact identified in the Dec. 14, 2010, opinion. The court grants the motion to the extent that NYCHA asks the court to clarify that NYCHA’s claims include all the product types specified in its claim and supplemental submission.

For the reorganized debtors — Dennis J. O’Grady and Mark E. Hall (co-counsel) (Riker, Danzig, Scherer, Hyland & Perretti); Andrew J. Rossman and Jacob J. Waldman (special counsel) (Quinn Emanuel, Urquhart & Sullivan); and Marc J .Kurzman (outside counsel) (Sandak, Hennessey & Greco). For the New York City Housing Authority — Jeffrey M. Pollack (Fox Rothschild) and Philip J. Goodman.