State Codes and Statutes

Statutes > Texas > Civil-practice-and-remedies-code > Title-6-miscellaneous-provisions > Chapter-149-limitations-in-civil-actions-of-liabilities-relating-to-certain-mergers-or-consolidation

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.

State Codes and Statutes

Statutes > Texas > Civil-practice-and-remedies-code > Title-6-miscellaneous-provisions > Chapter-149-limitations-in-civil-actions-of-liabilities-relating-to-certain-mergers-or-consolidation

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.


State Codes and Statutes

State Codes and Statutes

Statutes > Texas > Civil-practice-and-remedies-code > Title-6-miscellaneous-provisions > Chapter-149-limitations-in-civil-actions-of-liabilities-relating-to-certain-mergers-or-consolidation

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.