CHAPTER 149. LIMITATIONS IN CIVIL ACTIONS OF LIABILITIES RELATING TO CERTAIN MERGERS OR CONSOLIDATIONS
CIVIL PRACTICE AND REMEDIES CODE
TITLE 6. MISCELLANEOUS PROVISIONS
CHAPTER 149. LIMITATIONS IN CIVIL ACTIONS OF LIABILITIES RELATING
TO CERTAIN MERGERS OR CONSOLIDATIONS
Sec. 149.001. DEFINITIONS. In this chapter:
(1) "Asbestos claim" means 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:
(A) property damage caused by the installation, presence, or
removal of asbestos;
(B) the health effects of exposure to asbestos, including any
claim for:
(i) personal injury or death;
(ii) mental or emotional injury;
(iii) risk of disease or other injury; or
(iv) the costs of medical monitoring or surveillance; and
(C) any claim made by or on behalf of any person exposed to
asbestos, or a representative, spouse, parent, child, or other
relative of the person.
(2) "Corporation" means a corporation for profit, including:
(A) a domestic corporation organized under the laws of this
state; or
(B) a foreign corporation organized under laws other than the
laws of this state.
(3) "Successor asbestos-related liabilities" means any
liabilities, whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, or due or to become due, that are related in any
way to asbestos claims that were assumed or incurred by a
corporation as a result of or in connection with a merger or
consolidation, or the plan of merger or consolidation related to
the merger or consolidation, with or into another corporation or
that are related in any way to asbestos claims based on the
exercise of control or the ownership of stock of the corporation
before the merger or consolidation. The term includes liabilities
that, after the time of the merger or consolidation for which the
fair market value of total gross assets is determined under
Section 149.004, were or are paid or otherwise discharged, or
committed to be paid or otherwise discharged, by or on behalf of
the corporation, or by a successor of the corporation, or by or
on behalf of a transferor, in connection with settlements,
judgments, or other discharges in this state or another
jurisdiction.
(4) "Successor" means a corporation that assumes or incurs, or
has assumed or incurred, successor asbestos-related liabilities.
(5) "Transferor" means a corporation from which successor
asbestos-related liabilities are or were assumed or incurred.
Added by Acts 2003, 78th Leg., ch. 204, Sec. 17.01, eff. June 11,
2003.
Sec. 149.002. APPLICABILITY. (a) The limitations in Section
149.003 shall apply to a domestic corporation or a foreign
corporation that has had a certificate of authority to transact
business in this state or has done business in this state and
that is a successor which became a successor prior to May 13,
1968, or which is any of that successor corporation's successors,
but in the latter case only to the extent of the limitation of
liability applied under Section 149.003(b) and subject also to
the limitations found in this chapter, including those in
Subsection (b).
(b) The limitations in Section 149.003 shall not apply to:
(1) workers' compensation benefits paid by or on behalf of an
employer to an employee under the Texas Workers' Compensation
Act, Subtitle A, Title 5, Labor Code, or a comparable workers'
compensation law of another jurisdiction;
(2) any claim against a corporation that does not constitute a
successor asbestos-related liability;
(3) an insurance corporation, as that term is used in the
Insurance Code;
(4) any obligations under the National Labor Relations Act (29
U.S.C. Section 151 et seq.), as amended, or under any collective
bargaining agreement;
(5) a successor that, after a merger or consolidation, continued
in the business of mining asbestos or in the business of selling
or distributing asbestos fibers or in the business of
manufacturing, distributing, removing, or installing
asbestos-containing products which were the same or substantially
the same as those products previously manufactured, distributed,
removed, or installed by the transferor;
(6) a contractual obligation existing as of the effective date
of this chapter that was entered into with claimants or potential
claimants or their counsel and which resolves asbestos claims or
potential asbestos claims;
(7) any claim made against the estate of a debtor in a
bankruptcy proceeding commenced prior to April 1, 2003, under the
United States Bankruptcy Code (11 U.S.C. Section 101 et seq.) by
or against such debtor, or against a bankruptcy trust established
under 11 U.S.C. Section 524(g) or similar provisions of the
United States Code in such a bankruptcy proceeding commenced
prior to such date; or
(8) a successor asbestos-related liability arising from a claim
brought under Chapter 95, a common law claim for premises
liability, or a cause of action for premises liability, as
applicable, but only if the successor owned or controlled the
premise or premises at issue after the merger or consolidation.
Added by Acts 2003, 78th Leg., ch. 204, Sec. 17.01, eff. June 11,
2003.
Sec. 149.003. LIMITATIONS ON SUCCESSOR ASBESTOS-RELATED
LIABILITIES. (a) Except as further limited in Subsection (b),
the cumulative successor asbestos-related liabilities of a
corporation are limited to the fair market value of the total
gross assets of the transferor determined as of the time of the
merger or consolidation. The corporation does not have any
responsibility for successor asbestos-related liabilities in
excess of this limitation.
(b) If the transferor had assumed or incurred successor
asbestos-related 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 merger or consolidation, shall be
substituted for the limitation set forth in Subsection (a) for
purposes of determining the limitation of liability of a
corporation.
Added by Acts 2003, 78th Leg., ch. 204, Sec. 17.01, eff. June 11,
2003.
Sec. 149.004. ESTABLISHING FAIR MARKET VALUE OF TOTAL GROSS
ASSETS. (a) A corporation may establish the fair market value
of total gross assets for the purpose of the limitations under
Section 149.003 through any method reasonable under the
circumstances, including:
(1) by reference to the going concern value of the assets or to
the purchase price attributable to or paid for the assets in an
arm's-length transaction; or
(2) in the absence of other readily available information from
which fair market value can be determined, by reference to the
value of the assets recorded on a balance sheet.
(b) Total gross assets include intangible assets.
(c) Total gross assets include the aggregate coverage under any
applicable liability insurance that was issued to the transferor
whose assets are being valued for purposes of this section and
which insurance has been collected or is collectable to cover
successor asbestos-related liabilities (except compensation for
liabilities arising from workers' exposure to asbestos solely
during the course of their employment by the transferor). A
settlement of a dispute concerning such insurance coverage
entered into by a transferor or successor with the insurers of
the transferor 10 years or more before the enactment of this
chapter shall be determinative of the aggregate coverage of such
liability insurance to be included in the calculation of the
transferor's total gross assets.
(d) The fair market value of total gross assets shall reflect no
deduction for any liabilities arising from any asbestos claim.
Added by Acts 2003, 78th Leg., ch. 204, Sec. 17.01, eff. June 11,
2003.
Sec. 149.005. ADJUSTMENT. (a) Except as provided in
Subsections (b), (c), and (d), the fair market value of total
gross assets at the time of a merger or consolidation increases
annually at a rate equal to the sum of:
(1) the prime rate as listed in the first edition of the Wall
Street Journal published for each calendar year since the merger
or consolidation; and
(2) one percent.
(b) The rate in Subsection (a) is not compounded.
(c) The adjustment of fair market value of total gross assets
continues as provided under Subsection (a) until the date the
adjusted value is exceeded by the cumulative amounts of successor
asbestos-related liabilities paid or committed to be paid by or
on behalf of the corporation or a predecessor, or by or on behalf
of a transferor, after the time of the merger or consolidation
for which the fair market value of total gross assets is
determined.
(d) No adjustment of the fair market value of total gross assets
shall be applied to any liability insurance otherwise included in
the definition of total gross assets by Section 149.004(c).
Added by Acts 2003, 78th Leg., ch. 204, Sec. 17.01, eff. June 11,
2003.
Sec. 149.006. SCOPE OF CHAPTER. The courts in this state shall
apply, to the fullest extent permissible under the United States
Constitution, this state's substantive law, including the
limitation under this chapter, to the issue of successor
asbestos-related liabilities.
Added by Acts 2003, 78th Leg., ch. 204, Sec. 17.01, eff. June 11,
2003.