Georgia-Pacific is exploring a second bankruptcy to resolve asbestos claims

J. Joel Mercer, Bestwall’s chief legal officer, testified that Georgia-Pacific is actively exploring a second Chapter 11 bankruptcy filing to help resolve tens of thousands of asbestos claims tied to the company’s long-running Bestwall case.

The testimony, reported June 17, adds a confirmed new step to one of the most closely watched mass-tort bankruptcy fights in the country. Mercer said Georgia-Pacific has been negotiating with lawyers for asbestos claimants since the summer of 2025 and is considering a new filing as part of a broader path to settlement.

Mercer also said the purpose of a second bankruptcy would be to support a global settlement covering claims against both Georgia-Pacific and Bestwall. No formal second filing has been announced.

A long-running Bestwall case

Georgia-Pacific created Bestwall in 2017 through a Texas Two-Step divisional merger and placed its asbestos liabilities into the new entity. Bestwall then sought Chapter 11 protection in North Carolina, where the case has been used to address roughly 64,000 asbestos claims.

The structure has been controversial from the start. Claimant lawyers have argued that the Texas Two-Step strategy improperly shifts liabilities away from the operating company and into a separate entity designed to manage the litigation.

That dispute has shaped the case ever since. The latest reporting says some claimant lawyers have refused to negotiate with Bestwall because of how it was formed.

Settlement talks and the trustee fight

Mercer said settlement discussions with claimant lawyers have been underway since summer 2025. Those talks indicate Georgia-Pacific has not abandoned a restructuring-based solution, even after years of litigation and no final plan in the current Bestwall proceeding.

At the same time, claimants have pushed the court to appoint a Chapter 11 trustee for Bestwall. Their request reflects a deeper fight over control of the case and over whether the current structure can produce a fair resolution for asbestos victims.

The proposed second bankruptcy would also be filed in the same North Carolina court already handling Bestwall’s case. That means any new filing would not end the existing dispute so much as extend it into a new phase before the same bankruptcy court.

What changed in June

This is not the first time Georgia-Pacific has been linked to a new filing. WSJ reported on April 13 that the company had told some claimant firms it had given up on the current Bestwall proceeding and was considering a new bankruptcy through another affiliate or a newly created entity.

The June 17 testimony is more significant because it confirms the company is actively exploring that path rather than merely being rumored to consider it. It also ties the possible filing to a specific settlement objective: resolving claims against both Georgia-Pacific and Bestwall in one package.

For asbestos claimants, a new filing could reset the legal board in a case that has already stretched on for years. For Georgia-Pacific, it could provide a way to pursue a global settlement after the current Bestwall process failed to produce a final resolution.

The next developments to watch are any formal bankruptcy filing by Georgia-Pacific, Bestwall or another related entity, as well as further court filings or hearings in North Carolina. Claimant responses to any renewed settlement push will also show whether the strategy can move forward.