In Re Reinz Wisconsin Gasket, LLC

• Court: Court of Chancery of Delaware
• Decided: April 2, 2026
• Docket: 2022-0859-MTZ
• Status: Published

Opinion

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE IN RE REINZ WISCONSIN ) GASKET, LLC, a cancelled Delaware ) C.A. No. 2022-0859-MTZ limited liability company )

MEMORANDUM OPINION Date Submitted: October 23, 2025 Date Decided: April 2, 2026

K. Tyler O’Connell, R. Eric Hacker, MORRIS JAMES LLP, Wilmington, Delaware; Charles W. Branham, III, Todd Barnes, DEAN OMAR BRANHAM SHIRLEY, LLP, Dallas, Texas, Attorneys for Petitioner.

Jody C. Barillare, Brian Loughnane, MORGAN, LEWIS & BOCKIUS LLP, Wilmington, Delaware; Laura H. McNally, MORGAN LEWIS & BOCKIUS LLP, Philadelphia, Pennsylvania, Attorneys for Receiver Peter D. Protopapas.

Kelly E. Farnan, Blake Rohrbacher, Mari Boyle, RICHARDS, LAYTON & FINGER, P.A., Wilmington, Delaware, Attorneys for Intervenor DCo LLC.

Jaclyn C. Marasco, FAEGRE DRINKER BIDDLE & REATH LLP, Wilmington, Delaware; Robert A. Kole, John C. Calhoun, CHOATE HALL & STEWART LLP, Boston, Massachusetts, Attorneys for Intervenor Enstar (US) Inc.

Douglas D. Herrmann, Emily L. Wheatley, TROUTMAN PEPPER LOCKE LLP, Wilmington, Delaware, Attorneys for Intervenor Continental Casualty Company.

Carmella P. Keener, COOCH AND TAYLOR, P.A., Wilmington, Delaware; Michael J. Cohen, James M. Sosnoski, MEISSNER TIERNEY FISHER & NICHOLS S.C., Milwaukee, Wisconsin, Attorneys for Intervenor Nationwide Indemnity Company responding on behalf of Employers Insurance Company of Wausau.

ZURN, Vice Chancellor. This case has taken over three years to tee up a single question: whether a

dissolved and cancelled limited liability company’s certificate of cancellation should

be nullified due to the company’s allegedly improper dissolution. This opinion

concludes the petitioner has failed to prove that nullification is warranted.

The petitioner here is a plaintiff in an asbestos action brought against the

company. She turned to this Court to appoint a receiver over the company and

nullify its certificate of cancellation, alleging the company’s dissolution and

cancellation violated Sections 18-203 and 18-804 of Delaware’s Limited Liability

Company Act. She alleges the company still had assets when it dissolved, that it

failed to set aside those assets to provide for claimants, and that its dissolution and

cancellation were bad faith maneuvers to avoid liability on known claims.

Earlier in the case, I found the petitioner had demonstrated good cause to

appoint a receiver over the company for the limited purpose of investigating whether

the company had assets when it filed its notice of dissolution and cancellation. I

deferred ruling on nullification until the receiver submitted a report on that question.

A receiver was appointed, and the case marched on.

The receiver determined the company had three types of assets when it

dissolved: unexhausted insurance policies, litigable insurance coverage claims, and

litigable breach of fiduciary duty and aiding and abetting claims. But for contingent

rights like insurance coverage and litigable claims to constitute assets for purposes

1 of Section 18-804, they must be able to provide reasonable compensation for

claimants.

I conclude the insurance policies the receiver identified are not company

assets for purposes of Section 18-804 because they do not afford the company any

coverage. The petitioner failed to prove two of the policies exist. For others, the

petitioner failed to prove the company had acquired rights to coverage under the

policies. For still others, the petitioner failed to prove the policies would be able to

compensate for pending or likely claims.

I also conclude the litigable claims the receiver identified do not constitute

assets of the company because they offer no value. A certificate of cancellation will

not be nullified based on hypothetical litigable claims that would yield no reasonable

recovery. The claims at issue here are largely exculpated by the company’s

operating agreement or otherwise not viable.

The petitioner failed to prove the company violated the Limited Liability

Company Act by filing a certificate of cancellation without setting assets aside for

claimants. The petitioner has thus failed to secure a nullification of that certificate.

2 I. BACKGROUND 1

Reinz Wisconsin Gasket, LLC (“RWG” or the “Company”) is a Delaware

limited liability company that dissolved and was cancelled in August 2022.2 Nine

months before its dissolution, petitioner Linda A. Cook (“Petitioner”) had sued the

Company for products liability in the United States District Court for the District of

Massachusetts (the “Massachusetts Action”).3 Then Petitioner came to Delaware

and filed this action seeking nullification of RWG’s certificate of cancellation,

claiming RWG’s dissolution violated Sections 18-203 and 18-804 of Delaware’s

Limited Liability Company Act (the “LLC Act”). She alleges RWG had assets,

including unexhausted insurance policies and litigable claims, that it failed to set

aside to provide for claimants when it filed its notice of dissolution and cancellation.4

1 Citations in the form of “Trial Tr. —” refer to the trial transcript, available at docket item (“D.I.”) 70. Citations in the form of “Hr’g Tr. —” refer to the transcript for the oral argument on Petitioner’s Motion to Nullify Cancellation of Reinz Wisconsin Gasket, LLC and Request to Expand Receiver’s Authority, available at D.I. 271. Citations in the form “JX —” refer to the parties’ joint trial exhibits. D.I. 64. Citations in the form “RX —” refer to the exhibits to the receiver’s final report, available at D.I. 218; D.I. 219; D.I. 220; D.I. 221; D.I. 222; D.I. 223; D.I. 224; D.I. 225; D.I. 226. Citations in the form “PTO —” refer to the parties’ stipulated pre-trial order, available at D.I. 55. 2 JX 153; JX 156. 3 JX 93 ¶¶ 66, 69; JX 121. Petitioner reached a settlement with certain defendants in the Massachusetts Action, including intervenor DCo, LLC. D.I. 256, Transmittal Affidavit of Mari Boyle, Esq. in Support of DCo LLC’s Brief in Opposition to Petitioner’s Motion to Nullify Cancellation of Reinz Wisconsin Gasket, LLC and Request to Expand Receiver’s Authority [hereinafter “Boyle Aff.”], at Ex. 3. One defendant went to trial and obtained a defense verdict on September 28, 2023. Boyle Aff. Ex. 4. The case has been inactive since October 3, 2023. Boyle Aff. Ex. 5. 4 D.I. 1 [hereinafter “Pet.”]. 3 RWG’s corporate history informs what assets, if anything, remained in its

name when RWG dissolved. That history begins with Wisconsin Gasket &

Manufacturing Co. (“WG&M”), a Wisconsin corporation established in 1943 and

incorporated in 1944.5 WG&M was established to manufacture and supply gaskets

to Milwaukee’s war plants. 6 Petitioner’s late husband, Roland Cook, was allegedly

exposed to asbestos when he worked with gaskets made by RWG and other

manufacturers from 1964 through 1968, and again from 1976 through 1989.7

A. WG&M’s Insurance Coverage

WG&M had insurance coverage for asbestos-related personal injury liability

under four sets of policies: (1) comprehensive general liability policies issued by

Employers Mutual Liability Insurance Company of Wisconsin, an affiliate of

intervenor Employers Insurance Company of Wausau (“Wausau”); 8 (2)

comprehensive general liability and umbrella policies issued by the Kemper

Insurance Companies (“Kemper”), which would later do business as Lumbermens

5 JX 193 (“In 1943 a manufacturing company was created to supply gaskets to the production lines of Milwaukee’s war plants.”); JX 107; JX 1 (reflecting WG&M filed its articles of incorporation with the Wisconsin Department of State on December 28, 1944). 6 JX 193. 7 JX 93 ¶¶ 65–66. 8 RX 73; RX 74; RX 75; RX 76; RX 77; RX 78; RX 79; RX 80; RX 81; RX 82; RX 83; RX 84; RX 85; RX 86; RX 87; D.I. 253, Affidavit of Annette Fochs in Support of Employers Insurance Company of Wausau’s Response in Opposition to Petitioner’s Motion to Nullify [hereinafter “Fochs Aff.”], at Ex. C; Fochs Aff. Ex. D. 4 Mutual Casualty Company and American Manufacturers Mutual Insurance

Company (collectively, “Lumbermens”); 9 (3) an excess policy issued by Continental

Casualty Company (“Continental”); 10 and (4) umbrella policies issued by Aetna

Casualty & Surety Company, later called Travelers Casualty & Surety Company

(“Travelers”).11 WG&M was the named insured on each of these policies.

WG&M was insured under seventeen Wausau policies covering successive,

roughly one-year policy periods between 1944 and 1959.12 The policies require

Wausau to indemnify WG&M for personal injury liability caused by an

“occurrence,” defined as “either an accident or a continuous or repeated exposure to

9 JX 2; JX 3; JX 4. The record does not contain copies of the comprehensive general liability policies issued by Lumbermens to WG&M. 10 RX 88. 11 RX 89; RX 90; RX 91. 12 RX 73 (covering a policy period from April 17, 1944 through May 1, 1945); RX 74 (covering a policy period from May 1, 1947 through May 1, 1948); RX 75 (covering a policy period from May 1, 1948 through May 1, 1949); RX 76 (covering a policy period from May 1, 1949 through May 1, 1950); RX 77 (covering a policy period from May 1, 1950 through May 1, 1950); RX 78 (covering a policy period from May 1, 1951 through May 1, 1952); RX 79 (covering a policy period from May 1, 1952 through May 1, 1953); RX 80 (covering a policy period from May 1, 1953 through May 1, 1954); RX 81 (covering a policy period from May 1, 1954 through May 1, 1955); RX 82 (covering a policy period from May 1, 1955 through July 8, 1955); RX 83 (covering a policy period from July 8, 1955 through May 1, 1956); RX 84 (covering a policy period from May 1, 1956 through May 1, 1957); RX 85 (covering a policy period from May 1, 1957 through May 1, 1958); RX 86 (covering a policy period from May 1, 1958 through May 1, 1959); RX 87 (covering a policy period from May 1, 1959 through May 1, 1960); Fochs Aff. Ex. C (covering a policy period from May 1, 1945 through May 1, 1946); Fochs Aff. Ex. D (covering a policy period from May 1, 1946 through May 1, 1947). 5 any condition resulting in injury during the policy period.” 13 Later-discovered injury

caused by asbestos exposure during a particular policy period falls within the scope

of the policy.

WG&M had additional coverage in excess and umbrella policies. The

Continental excess policy has a policy period running from November 22, 1977

through September 20, 1978.14 It provides $4,000,000 in excess coverage for “the

amount of loss which is in excess of the applicable limits of liability of the

underlying insurance.” 15 The schedule of underlying insurance lists two policies

applicable to asbestos-related personal injury liability, both issued by Lumbermens:

a comprehensive general liability policy with a $500,000 liability limit, and an

umbrella policy with a $1,000,000 liability limit. 16 So $1,500,000 must be exhausted

before the Continental policy’s excess coverage attaches.

WG&M’s three umbrella policies from Travelers cover successive, one-year

policy periods between December 1978 and December 1981.17 These policies

provide $5,000,000 in excess coverage “for ultimate net loss in excess of the

13 E.g., RX 84 at 4. 14 RX 88 at 1. 15 Id. at 2. 16 Id. at 6. 17 RX 89 (covering a policy period from December 5, 1978 through December 5, 1979); RX 90 (covering a policy period from December 5, 1979 through December 5, 1980); RX 91 (covering a policy period from December 5, 1980 through December 5, 1981). 6 applicable underlying limit.”18 Each policy identifies an underlying comprehensive

general liability policy issued by Lumbermens with a $500,000 liability limit. 19 So

$500,000 must be exhausted for each policy before coverage attaches.

B. WG&M Sells Its Assets To The Reinz Corporate Family.

In May 1981, WG&M entered into an agreement (the “Purchase Agreement”)

to sell its assets to a Delaware subsidiary (“Wisconsin Gasket DE”) of Reinz

Dichtungs GmbH, a German entity (the “Asset Sale”).20 Reinz Dichtungs GmbH

owned several gasket manufacturing companies and facilities around the world.21

Wisconsin Gasket DE would be called WG&M after the Asset Sale, but to

distinguish it from the seller, I will still call the buyer Wisconsin Gasket DE.22

The Purchase Agreement contemplated the transfer of all of WG&M’s assets,

but only three narrowly defined categories of liabilities.23 WG&M represented that

it had disclosed all its insurance policies on an Exhibit G, and that all such policies

would be transferred to Wisconsin Gasket DE at closing. 24 Exhibit G is not part of

18 RX 89 § 2.1; RX 90 § 2.1; RX 91 § 2.1. 19 RX 89 at RWG_TRAV000101; RX 90 at RWG_TRAV000087; RX 91 at RWG_TRAV000132. 20 JX 6; JX 7 [hereinafter “Purchase Agreement”]; JX 193. 21 See RX 21; JX 9 at 2–3. 22 See Purchase Agreement § 8.3. 23 Id. §§ 1.1, 2.2. 24 Id. § 6.1(g). 7 the record. 25 To effectuate the Asset Sale, including the transfer of WG&M’s

insurance rights, the Purchase Agreement required WG&M to deliver “deeds, bills

of sale, endorsements, assignments, and other good and sufficient instruments of

conveyance and transfer” at closing.26

After the Asset Sale, WG&M changed its name to Gerschke & Erdman Ltd.27

Pursuant to a noncompetition agreement the Purchase Agreement required,

Gerschke & Erdman Ltd. stopped making gaskets. 28 It held only the proceeds from

the Asset Sale, and its only purpose was to invest those proceeds.29 A month after

the Asset Sale, Gerschke & Erdman Ltd. merged with and into a Delaware

corporation of the same name. 30 Gerschke & Edman Ltd. changed its name to G &

G of Delaware Ltd. in 2004, and dissolved in 2019. 31

25 D.I. 217 [hereinafter “Report”] at 32 (“Receiver has been unable to locate a copy of Exhibit G.”); JX 178 [hereinafter “Stringham Tr.”] at 81–82; JX 182 [hereinafter “Wawrzyniak Tr.”] at 50. 26 Purchase Agreement § 1.2(a). 27 RX 18 at 1, 24–25. 28 Purchase Agreement § 10.1(g); RX 23 ¶ 10. 29 RX 23 ¶ 10. 30 RX 18 at 26. 31 RX 23 ¶¶ 14–17. 8 Wisconsin Gasket DE, on the other hand, continued its gasket manufacturing

operations. In January 1985, it changed its name to Reinz Wisconsin Gasket

Company (“RWG Co.”). 32

From 1981 through 1991, Wisconsin Gasket DE and RWG Co. had insurance

coverage for asbestos-related personal injury liability under two sets of policies: (1)

comprehensive general liability and excess policies issued by Lumbermens,33 and

(2) umbrella policies issued by Travelers. 34 Each of the Travelers umbrella policies

lists an underlying comprehensive general liability policy issued by Lumbermens

with a $500,000 liability limit.35 So $500,000 must be exhausted for each policy

before coverage attaches.

32 JX 16; JX 28 at 2; JX 193. 33 JX 11 (primary policy covering a policy period from September 1, 1982 through September 1, 1984); JX 15 (primary policy covering a policy period from September 1, 1984 through September 1, 1987); JX 17 (primary policy covering a policy period from September 1, 1986 through September 1, 1987); JX 19 (primary policy covering a policy period from September 1, 1987 through September 1, 1988); JX 20 (primary policy covering a policy period from September 1, 1988 through September 1, 1989); JX 21 (primary policy covering a policy period from September 1, 1989 through September 1, 1990); JX 22 (primary policy covering a policy period from September 1, 1990 through September 1, 1991); JX 18 (excess policy covering a policy period from September 1, 1986 through September 1, 1987). 34 RX 92 (umbrella policy covering a policy period from December 5, 1982 through December 5, 1983); RX 93 (umbrella policy covering a policy period from December 5, 1983 through February 1, 1984). 35 RX 92 at RWG_TRAV000072; RX 93 at RWG_TRAV000115. 9 The record is silent as to RWG Co.’s insurance coverage for asbestos-related

personal injury liability after 1991.

C. Dana Corp. Acquires RWG Co.

In August 1993, Dana Beteiligungs GmbH acquired RWG Co.’s parent

company, Reinz Dichtungs GmbH.36 Then the acquirer’s parent company, Dana

Corporation (“Dana Corp.”) acquired Reinz Dichtungs GmbH’s interest in RWG

Co., making RWG Co. a Dana Corp. subsidiary.37

In December 2005, Dana Corp. incorporated RWG as a new wholly owned

subsidiary.38 In January 2006, RWG Co. merged with and into RWG, with RWG

surviving as a Dana Corp. subsidiary.39 RWG’s initial operating agreement provided

that its “sole Member is Dana Corp[.]”40

D. Dana Corp. And RWG File For Chapter 11 Bankruptcy And Undergo A Restructuring.

In March 2006, Dana Corp. and its subsidiaries, including RWG, filed for

Chapter 11 bankruptcy. 41 RWG filed a list of its known assets in schedules.42

36 JX 25; JX 26. 37 JX 26 (“Reinz [Dichtungs GmbH] sells and conveys to Dana [Corp.] all of its right, title, and interest in and to” the “outstanding share capital of RWG.”). 38 JX 29; JX 30. 39 JX 31. 40 JX 30 § 2(A) (RWG’s initial operating agreement dated December 22, 2005). 41 JX 32; JX 40 at RESP0002103. 42 JX 33. 10 Schedule B asked RWG as the debtor to list “[i]nterest in insurance policies” and

“[n]ame [the] insurance company of [each] policy and itemize surrender or refund

value of each.”43 For “Description and Location of Property,” RWG listed “See

Exhibits B-9a and B-9b immediately following Schedule B.”44 For “Net Book Value

of Debtor’s Interest in Property, Without Deducting Any Secured Claim or

Exemption,” RWG listed “$47,936.” 45 On Exhibit B-9a, for “Description,” RWG

listed “Prepaid Insurance,” and under “Net Book Value,” RWG listed “$47,936.”46

In a footnote, RWG stated: “In addition to the insurance policies listed on this

Schedule, the Debtor may have rights to coverage under certain other insurance

policies listed in Schedule G for this Debtor.” 47 Exhibit B-9a does not list or attach

43 Id. at RESP0000216 (capitalization altered). 44 Id. (capitalization altered). 45 Id. (capitalization altered). 46 Id. at RESP0000220 (capitalization altered). 47 Id. 11 a list of policies. Exhibit B-9b does not exist.48 Schedule G does not include

insurance policies. 49

In December 2007, the bankruptcy court confirmed the Third Amended Joint

Plan of Reorganization of Dana Corp. and its subsidiaries, including RWG (the

“Reorganization Plan”). 50 The Reorganization Plan went into effect on January 31,

2008. 51

Pursuant to the Reorganization Plan, Dana Corp. undertook a series of

restructuring transactions “to streamline [its] corporate structure.” 52 As part of the

restructuring, Dana Corp. merged into a new subsidiary named Dana Companies,

LLC (“DCo”), and RWG became a DCo subsidiary. 53 RWG then transferred all of

its operating assets and real estate to a separate Dana Corp. subsidiary created to

48 I wrote to the parties asking them to submit any attachments or other exhibits to Schedule B or certify that they do not exist. D.I. 69. The parties responded in separate letters certifying that the requested documents do not exist. D.I. 71; D.I. 72. Schedule B and its exhibits were prepared by counsel not involved in this action. According to intervenor DCo LLC’s counsel, Schedule B’s instruction to list only “[i]nterests in insurance policies” with a “surrender or refund value” suggests RWG “had no reason to include on its Schedule B any information about expired insurance policies, including policies issued in the 1980s by Lumbermens.” D.I. 71. 49 JX 33 at RESP0000250. 50 JX 40 at RESP00002013–14. 51 JX 43 at RESP0002185; JX 37. 52 JX 40 at RESP0002040. 53 RX 34. In February 2018, Dana Companies, LLC changed its name to DCo LLC. See JX 59. This opinion refers to both Dana Companies, LLC and DCo LLC as “DCo.” 12 house some of Dana Corp.’s active administrative operations.54 The bankruptcy

court recognized RWG would be “solvent . . . for the foreseeable future” even after

that transfer.55 The Reorganization Plan instructed Dana Corp. to “dissolve,

liquidate, or merge inactive entities that no longer serve an ongoing business

purpose.” 56

In 2014, DCo executed RWG’s most recent operating agreement (the

“Operating Agreement”). 57 The Operating Agreement designates DCo as RWG’s

sole member. 58 And it provides that RWG may dissolve at DCo’s election.59

54 JX 41 § 1.4 (describing the “Contributed Assets” as including RWG’s “right, title and interest in and to any and all assets, property, rights and claims of every kind, character, and description . . . that is owned or used by [RWG] in connection with, or relating to, the conduct of the business of [RWG] at the plants, offices and other facilities and locations set forth opposite [RWG’s] name in the column labeled ‘Transferred Facilities’ on Annex A”); JX 41 at Annex A (describing the “Transferred Facilities” as the “Milwaukee, WI (plant and warehouse lease)”); JX 44 (warranty deed conveying RWG’s real estate to Dana Sealing Products, LLC); JX 82 at RESPRESP0003399 (“Pursuant to Dana Bankruptcy Plan, Reinz Wisconsin Gasket, LLC transferred all operating assets to Dana Sealing Products, LLC.”); Trial Tr. 66, 109. 55 JX 40 at RESP0002041. 56 RX 34 at 2. 57 JX 46. 58 Id. § 2(A) (“The sole Member is Dana Companies, LLC”); PTO ¶ 5 (“DCo LLC was the sole member of [RWG] before [RWG’s] cancellation”). JX 46 §§ 5–(A) (“[T]he Company shall be dissolved upon . . . [t]he election of the 59

Member to dissolve and terminate the Company.”). 13 E. An Insurance Arbitrageur Acquires RWG.

In December 2016, Enstar Holdings (US) Inc. (“Holdings”) acquired DCo,

and in turn, RWG.60 Holdings is a subsidiary of Enstar Group Limited (“Enstar”),

which “acquire[s] (re)insurance companies and legacy manufacturing companies

with direct exposure to asbestos and environmental liabilities . . . , which are either

in run-off or can be placed into run-off following [an] acquisition.” 61 It “receive[s]

investment returns from the investment of the assets acquired with these companies,

which [Enstar] use[s] to settle the liabilities acquired and may take many years to

complete.”62

Following the acquisition, DCo entered into an administrative services

agreement with Holdings’ subsidiary Enstar (US) Inc. (“EUSI”). 63 Under that

agreement, DCo would pay EUSI for administrative, legal, insurance-related, and

other services.64

JX 52; JX 54 at RESP0002449–50; JX 49 at ENT000089. DCo remained RWG’s sole 60

member following the acquisition. See PTO ¶ 5. 61 JX 114 at RESP0002479; JX 54 at RESP0002198 (“Enstar acquires and manages insurance and reinsurance companies and portfolios of insurance and reinsurance business in run-off.”). 62 JX 114 at RESP0002479. 63 JX 53. The Report mistakenly states that EUSI is the “parent company of DCo and, in turn, RWG.” Report at App’x A. DCo’s parent company is Holdings, not EUSI. See JX 54 at RESP0002449. 64 JX 53. 14 F. DCo And EUSI Investigate RWG’s Insurance Coverage.

In October 2020, RWG was named a defendant in its first asbestos lawsuit.65

Another followed in January 2021. 66 So RWG began investigating its historical and

present insurance coverage for the period of the plaintiffs’ alleged exposure.

In February 2021, RWG’s Vice President Vicki Stringham wrote to a Dana

Incorporated director that “plaintiffs’ counsel have been delving deep into discovery

responses,” and that “[t]heir newest target is Reinz Wisconsin Gasket LLC.” 67 In

that email, she asked: “Dana purchased the RWG stock from the German entity

Reinz Dichtungs, GmbH. Technically, we should have access to the insurance

policies. You don’t happen to know of any such policies?”68 The director responded

that he could not find anything. 69

65 JX 65. The action was initially filed in November 2017 in the Superior Court for the Commonwealth of Massachusetts. See JX 56; see also JX 144 at RESP0007443 (“The first lawsuit against RWG was filed in November 2017.”). The plaintiff’s fourth amended complaint named RWG as a defendant and alleged that exposure to asbestos and asbestos- containing products manufactured by the defendants from 1978 to 2003 caused her decedent’s mesothelioma and death. JX 65 ¶ 8–10. 66 See Report at App’x C. The Report states that “[a]t the time RWG dissolved, it had been named in approximately fifty lawsuits alleging asbestos exposure and liability from the 1960s through the 2000s.” Report at 51 & App’x C. That statement is misleading. Of the fifty-four lawsuits identified in Appendix C, most were brought against RWG’s predecessors, not RWG. And five were brought after RWG’s dissolution. See Boyle Aff. Ex. 2. 67 JX 72 at RESP0007590. 68 Id. 69 Id. at RESP0007589. 15 A few months later, Stringham found “notice letters” to Continental, “and

potentially a policy number” while cleaning out an office.70 The next month, DCo,

on RWG’s behalf, engaged an insurance archivist to locate and identify RWG’s

historical insurance coverage. 71 In September, DCo gave the insurance archivist

documents it had related to the Continental policies to aid his search.72

In October, the archivist sent a status update to DCo and EUSI.73 The archivist

reported that he had contacted Wisconsin Gasket DE’s insurance broker, Stanley B.

Strelka. 74 Strelka gave the archivist leads on workers’ compensation policies,

Lumbermens policies dating back to 1960, and names of other contacts who might

have more information. 75

In December, the archivist emailed another status update on his research

efforts.76 That update presented a “good news/bad news situation[].”77 The good

70 JX 75 at RESP0004292; Stringham Tr. 83–84. 71 JX 76; Wawrzyniak Tr. 28–29; Stringham Tr. 83. 72 JX 82 at RESP0003398–3413. 73 JX 85 at RESP0007602. 74 JX 88 at RESP0002725 (“Stanley Strelka of Professional Insurance Services, the company’s insurance broker through the mid to late 1980s, recently confirmed the lengthy relationship with Kemper Insurance.”); JX 8 at RESP0003401; JX 13 at RESP0003406– 07, RESP0003410; JX 85 at RESP0007602–03. 75 JX 85 at RESP0007602–03. 76 JX 94 at RESP0003414. 77 Id. 16 news was that the “Lumbermens Liquidator” had located and provided archival

copies of “Lumbermens/Kemper” policies “from the critical years of interest.”78

The bad news was that the investigation had seemingly reached “a crossroads”

from there.79 Lumbermens and its affiliates had entered liquidation in 2013. 80 The

claims deadline was November 10, 2014.81 RWG did not file any claims before that

deadline because, according to DCo, there were no pending claims against RWG at

the time. 82 The archivist cautioned that “given the status of [Lumbermens] in

liquidation, the likely benefit [of the located policies] is much harder to determine.”83

The archivist thus suggested digging into “who the reinsurer was for these

policies.”84 But he noted that while “[the Lumbermens] policies all clearly show

78 Id.; see JX 2 (umbrella Lumbermens policy covering September 20, 1968 through September 20, 1971); JX 3 (umbrella Lumbermens policy covering September 20, 1971 through September 20, 1974); JX 4 (umbrella Lumbermens policy covering September 20, 1974 through September 20, 1977); JX 5 (workers compensation Lumbermens policy covering May 1, 1978 through May 1, 1979). 79 JX 94 at RESP0003414–15. 80 JX 45; JX 144 at RESP0007443. 81 JX 58 at RESP0003125. 82 Stringham Tr. 168 (“Q. All right. And did Reinz Wisconsin from emergence from bankruptcy up through 2014, did Reinz Wisconsin Gasket have any claims that it could have submitted to the insolvency for, or whatever it was, in Illinois? A. No, we did not.”). 83 JX 94 at RESP0003414. 84 Id. 17 that they were subject to facultative reinsurance,”85 he believed “it is much more

likely than not that there was not direct privity or a third party beneficiary

relationship with Hannover or some other reinsurer.”86 And he reported that his

efforts to contact a potential lead—a “German attorney who [RWG’s] broker

indicated had facilitated the reinsurance between Lumbermens and Hannover”—

were unsuccessful.87 Because he did not hear back from the German attorney, the

archivist suggested looking into potential “excess coverage over and above the

Lumbermens policies,” and contacting Reinz Dichtungs GmbH.88 Those leads, too,

seemed unpromising.89

85 See Brit. Ins. Co. of Cayman v. Safety Nat. Cas., 335 F.3d 205, 212 n.4 (3d Cir. 2003) (“There are two types of reinsurance – facultative and treaty. ‘Facultative reinsurance covers only a particular risk or a portion of it, which the reinsurer is free to accept or not.’ ‘Treaty insurance obligates the reinsurer to accept in advance a portion of certain types of risks that the ceding insurance company underwrites.’” (citations omitted) (citing and quoting Christiania Gen. Ins. Corp. of New York v. Great Am. Ins. Co., 979 F.2d 268, 271 (2d Cir. 1992))). 86 JX 94 at RESP0003414. 87 Id. 88 Id. at RESP0003414–15; see also Trial Tr. 47–48. 89 JX 94 at RESP0003415 (“From a quick glance at the attached policies, it appears that Lumbermens was actually writing its general liability coverage in two layers . . . . Perhaps there were additional excess layers, but that seems inconsistent with the former broker’s recollection.”); see also id. (“Alternatively, perhaps Reinz Dichtungs [GmbH] included Wisconsin Gasket [DE]/ [RWG] on its program through its own excess layers. If so, it seems we would have to go through Reinz Dichtungs [GmbH] to obtain that information. As I recall, we were not particularly optimistic that Reinz [Dichtungs GmbH] would be willing to provide us assistance in locating that type of information.”). 18 The archivist’s status update belied growing pessimism about the

investigation. He reported that based on his investigation, “it appears that all of the

relevant general liability coverage would have been issued by Lumbermens and/or

its affiliates.”90 And he noted that “[w]ith the new information we have, I feel like

we may be reaching the point where the likely return on investment starts to look

less optimistic.”91 EUSI responded to the update in January 2022, and set up a call

between EUSI, DCo, and the archivist at the end of the month.92

By that point, EUSI and DCo believed the archivist had “taken [the

investigation] as far as [he could].”93 After the archivist sent his invoice on February

11, DCo and EUSI emailed back and forth, with DCo asking “[a]re we done with

this investigation? I do not have additional money budgeted for [the archivist]” and

“[h]ave you called off [the archivist]? He seems the type to keep looking.” 94 On

February 14, EUSI told the archivist to “please stand down with any other work.” 95

90 Id. at RESP0003414. 91 Id. 92 JX 105. 93 JX 104 at RESP0007932. 94 JX 104. 95 JX 105 at RESP0007934. 19 G. RWG Dissolves.

Having failed to locate any other insurance policies, DCo determined

dissolution was RWG’s best course. On August 25, 2022, EUSI kicked off a closing

diligence process. EUSI’s legal counsel asked various individuals to confirm

whether RWG had any “real property or leases,” 96 “outstanding loans payable or

receivable” or “open bank accounts,” 97 unpaid taxes, 98 “regulatory licenses” or

“intellectual property,” 99 “employees,”100 “outstanding accounts receivable,”

“creditors (suppliers, lenders, service providers, utilities, etc.),” or “assets.”101 Each

representative responded in the negative. 102

The same day, DCo called a special meeting for August 29 to “discuss the

dissolution of Reinz Wisconsin Gasket LLC.”103 At the meeting, DCo presented a

96 JX 137. 97 JX 138. 98 JX 139. 99 JX 140. 100 JX 141. 101 JX 146. 102 See JX 137 (“I am not aware of any leases or real property for this entity.”); JX 138 (“There are no loans payable or receivable.”); id. (“I can confirm that there are no open bank accounts.”); JX 139 (“The company has filed and paid all taxes to date.”); JX 140 (“I am not aware of either [regulatory licenses or intellectual property].”); JX 141 (“There are no employees.”); JX 146 (responding “[n]o to all questions below” to inquiry about any outstanding accounts receivables, creditors, or assets”); see also JX 154 (RWG’s closing checklist). 103 JX 136. 20 “Wind Up Plan” for the Company.104 The presentation included “background”

information about RWG and three possible options DCo could pursue in connection

with RWG’s windup. 105 The slide titled “Reinz Wisconsin Gasket LLC

Background” included bullet points such as:

• “RW[G] lacks insurance (following the liquidation of Lumbermens Mutual Casualty Company) and has no assets.”106 • “At the time of the bankruptcy, RWG was not capitalized.” 107 • “RWG currently has 6 cases pending against it.”108 • “Lumbermens Mutual Casualty Company is the sole insurance provider and was placed in liquidation by an Illinois court in 2013.”109 • “No indemnity has been paid in any RWG case.”110

A slide titled “Future Wind-Up Plan” included a bullet point stating “Confirmed lack

of assets or insurance available.”111 The next day, on August 30, RWG filed its

notice of dissolution and cancellation.112

104 JX 144 at RESP0007442–43, RESP0007448. 105 JX 144. 106 Id. at RESP0007443. 107 Id. 108 Id. 109 Id. 110 Id. 111 Id. at RESP0007448. 112 JX 153; JX 156. 21 H. Petitioner Files Suit In Massachusetts, Then Turns To This Court.

On August 19, 2021, Petitioner filed suit in the United States District Court

for the District Court of Massachusetts, against twenty-nine defendants whose

products allegedly contributed to her husband’s mesothelioma and death.113 The

original action did not name RWG as one of those defendants. 114

On November 17, Petitioner moved to amend her complaint to add RWG as

a defendant and to seek damages for her husband’s exposure to asbestos-containing

products while working part-time for repair shops from 1976 through 1989. 115 That

motion was granted.116 On December 2, Petitioner filed an amended complaint

naming RWG as a defendant.117

On July 27, 2022, Petitioner served RWG with a notice of deposition to cover

topics including the assets and insurance available to satisfy any judgment in that

action. 118 On August 30, RWG’s counsel in the Massachusetts Action indicated that

JX 77. Petitioner’s husband died on March 27, 2022, during the pendency of the 113

Massachusetts Action. JX 77; JX 93; JX 108. 114 JX 77. 115 JX 90. 116 JX 93. 117 Id. 118 JX 123. 22 RWG intended to produce a Rule 30(b)(6) witness.119 By September 1, RWG’s

counsel indicated it would not.120

Petitioner then turned to this Court. On September 23, 2022, Petitioner filed

a Verified Petition for Appointment of a Receiver in Dissolution Pursuant to 6 Del.

C. § 18-805 (the “Petition”) individually and as Executor of the Estate of Roland

Cook.121 The Petition sought to appoint a receiver to determine if RWG holds any

insurance policies or assets available to satisfy a damages award in the

Massachusetts Action, find RWG’s dissolution improper, and void RWG’s

certificate of cancellation. Count I seeks nullification of RWG’s certificate of

cancellation on the grounds that RWG failed to comply with Sections 18-203 and

18-804 of the LLC Act when dissolving.122 Count II seeks the appointment of a

receiver under Section 18-805 on the grounds that RWG did “not complete[] its

119 JX 142 at 2 (emailing on August 26, 2022: “I apologize for the delayed response, the client and NCC have been working to determine who the appropriate witness is for this deposition. I will provide you with a date for this deposition either later today, or Monday, August 29, 2022, at the latest.”); JX 152 at 2 (emailing on August 30, 2022: “The witness is Vicki Stringham. We will have a date for you by tomorrow.”). Vicki Stringham is Vice President, Assistant Secretary, and a director of RWG’s sole member DCo. PTO ¶¶ 14– 16. She also was a director of RWG until October 2021. Id. ¶ 18. 120 Plaintiff’s Motion to Compel Defendant Reinz Wisconsin Gasket LLC’s Rule 30(b)(6) Deposition and Motion for Sanctions, Linda A. Cook, Individually and as successor for the Estate of Roland Cook v. Foster Wheeler Energy Corp., C.A. No. 1:21-cv-11362-RWZ (D. Mass. Sept. 2, 2022), ECF No. 326, at 5–6 (describing a phone call between counsel). I may take judicial notice of this filing under Delaware Rule of Evidence 202(d)(1)(C). 121 See generally Pet. 122 Id. ¶¶ 16–18. 23 winding up process in accordance with applicable law.”123 Petitioner perfected

service by publication, as required for a cancelled entity. 124 Delaware counsel

entered their appearance “for Respondent Reinz Wisconsin Gasket LLC” on October

19.125 On October 28, “Respondent Reinz Wisconsin Gasket, LLC” filed an answer

to the Petition.126

The request to appoint a receiver was tried on a paper record on December 19,

2022. 127 The trial record includes over 600 joint exhibits.128 On March 20, 2023, I

issued a post-trial opinion (the “Post-Trial Opinion”) concluding Petitioner had

demonstrated good cause to appoint a receiver under Section 18-805.129 As in In re

Texas Eastern Overseas, Inc., the Post-Trial Opinion framed Section 18-805’s good

cause inquiry as whether Petitioner had “provided sufficient grounds for the Court

to conclude that it is reasonably likely [the respondent] continues to hold

undistributed assets.”130 Guided by that evidentiary standard, and on the record

123 Id. ¶ 22. 124 D.I. 5; In re VBR Agency, LLC, 274 A.3d 1068, 1076 (Del. Ch. 2022). 125 D.I. 10. 126 D.I. 14. 127 D.I. 66; Trial Tr. 128 D.I. 66. 129 In re Reinz Wis. Gasket, LLC, 2023 WL 2568326, at *1 (Del. Ch. Mar. 20, 2023) [hereinafter “Post-Trial Op.”]. Id. at *5 (quoting 2009 WL 4270799, at *4 (Del. Ch. No. 30, 2009), aff’d, 998 A.2d 852 130

(Del. 2010)). 24 before me at the time, I determined it was reasonably likely RWG had assets in the

form of unexhausted insurance policies when it dissolved.131 Those policies include

“unidentified prepaid insurance policies, the Aetna [workers’ compensation]

policies, and the [Continental] policies.”132

The Post-Trial Opinion “stop[ped] at the appointment of a receiver.”133 It did

not reach the question of whether to nullify RWG’s certificate of cancellation, noting

that nullification would require proof of a statutory violation by a higher evidentiary

standard. 134 I deferred ruling on Count I until the receiver, tasked with investigating

the existence of assets, submitted a report:

To nullify RWG’s certificate of cancellation, Petitioner would have to prove [a] statutory violation not just under a reasonable likelihood standard, but by a preponderance of the evidence. As the Court has stated in a similar context, “[a]lthough grounds may also exist for nullification of [the company’s] certificate of cancellation, the appointment of a receiver under § 1[8]-805 provides the necessary relief under the circumstances.” I need not yet reach whether RWG violated Section 18-203 . . . . The receiver should [] submit a report in support of the receiver’s determination, at which time I will revisit Count I. If the report and trial record supports a finding, by a preponderance of the evidence, that RWG violated Section 18-804, then its cancellation will be subject to nullification.135

131 Post-Trial Op. at *5–12. 132 Id. at *6. 133 Id. at *13. 134 Id. Id. (quoting Techmer Accel Hldgs., LLC v. Amer, 2010 WL 5564043, at *12 (Del. Ch. 135

Dec. 29, 2010)). 25 On August 3, 2023, I appointed Peter D. Protopapas (the “Receiver”) as

receiver of and for RWG. 136 The Receiver had a limited grant of authority to

investigate whether RWG had assets when it filed its notice of dissolution and

cancellation, including insurance policies, litigable claims, and claims or other

proceedings relating to any other assets.137 The Receiver was also empowered to

investigate “how this litigation has been funded and any claims related to the

same.”138 The Receiver dug into his investigation over the next several months.

Meanwhile, on December 15, Continental filed a motion to intervene in the

action, 139 which I granted on April 24, 2024. 140 On May 6, Continental filed an

answer and counterclaim for declaratory judgment. 141 The counterclaim sought “a

declaration of the rights and obligations, if any, of the parties under any policy issued

by Continental . . . that is alleged to be an asset of RWG.” 142 And on August 14, the

Receiver filed a Motion to Modify the Receivership Order, seeking the authority to

136 D.I. 105. 137 Id. 138 Id. 139 D.I. 140. 140 D.I. 180. 141 D.I. 181. 142 Id. ¶ 10. 26 marshal RWG’s assets and pursue claims on its behalf.143 I denied that motion as

premature on November 4. 144

On March 25, 2025, the Receiver submitted his final report (the “Report”).145

The Report identified thirty-three insurance policies purportedly affording coverage

to RWG at the time of its dissolution. It further concluded RWG possesses assets in

the form of litigable claims: insurance coverage claims, breach of fiduciary duty

claims against RWG’s officers and directors, and aiding and abetting claims against

DCo and EUSI.

On April 9, Petitioner filed her Motion to Nullify Cancellation of Reinz

Wisconsin Gasket, LLC and Request to Expand Receiver’s Authority (the

“Motion”).146 DCo, EUSI, and Wausau (collectively with Continental, the

“Intervenors”) moved to intervene in the action, and I granted their motions. 147 The

parties briefed the Motion by August 5,148 and I heard argument on the Motion on

October 23.149

143 D.I. 190. 144 D.I. 204; D.I. 205. 145 See Report. 146 D.I. 230. 147 D.I. 228; D.I. 242; D.I. 250; D.I. 251; D.I. 252; D.I. 254. 148 D.I. 230 [hereinafter “Pet’r’s Opening Br.”]; D.I. 253 [hereinafter “Wausau Opp. Br.”]; D.I. 255 [hereinafter “DCo Opp. Br.”]; D.I. 257 [hereinafter “Continental Opp. Br.”]; D.I. 258 [hereinafter “EUSI Opp. Br.”]; D.I. 264 [hereinafter “Pet’r’s Reply Br.”]. 149 D.I. 270; Hr’g Tr. 27 II. ANALYSIS

This memorandum opinion picks up where the Post-Trial Opinion left off. To

nullify RWG’s certificate of cancellation, Petitioner must prove RWG violated the

LLC Act by a preponderance of the evidence.150 If she carries that burden, I will

consider her request to grant the Receiver the authority to properly wind up the

Company.

“Proof by a preponderance of the evidence means proof that something is

more likely than not.” 151 This “means that certain evidence, when compared to the

evidence opposed to it, has the more convincing force and makes you believe that

something is more likely true than not. By implication, the preponderance of the

evidence standard also means that if the evidence is in equipoise” the party carrying

the burden will lose. 152

Petitioner has failed to meet that burden.

150 See Post-Trial Op. at *3; Martin v. Med-Dev Corp., 2015 WL 6472597, at *10 (Del. Ch. Oct. 27, 2015) (“‘Plaintiffs have the burden of proving each element, including damages, of each of their causes of action against each Defendant by a preponderance of the evidence.’” (quoting OptimisCorp v. Waite, 2015 WL 5147038, at *55 (Del. Ch. Aug. 26, 2015))). To be clear, contrary to Petitioner’s position, the Post-Trial Opinion did not “already decide[] that RWG or its successors held certain [assets]” under a preponderance of the evidence standard. Pet’r’s Reply Br. 7; see Post-Trial Op. at *5–12 (explaining Section 18-805’s good cause standard and concluding Petitioner had met that threshold). 151 Med-Dev Corp., 2015 WL 6472597, at *10 (quoting Agilent Techs., Inc. v. Kirkland, 2010 WL 610725, at *13 (Del. Ch. Feb. 18, 2010)). 152 Med-Dev Corp., 2015 WL 6472597, at *10 (internal quotation marks and footnotes omitted) (quoting Agilent Techs., Inc., 2010 WL 610725, at *13, and then quoting OptimisCorp, 2015 WL 5147038, at *55). 28 A. Motion To Nullify

Petitioner seeks to nullify RWG’s certificate of cancellation on the grounds

that RWG’s dissolution did not comply with Section 18-804 and Section 18-203 of

the LLC Act. Section 18-804 governs the distribution of a dissolved LLC’s assets.

Section 18-804(b)(2) requires a dissolved LLC to “make such provision as will be

reasonably likely to be sufficient to provide compensation for any” pending

claims.153 Section 18-804(b)(3) requires the LLC to do the same for foreseeable

future claims “likely to arise or become known to the limited liability company

within 10 years after the date of dissolution.” 154

“[T]he LLC Act provides some flexibility to those tasked with making

provision for a dissolved LLC’s claims and obligations.” 155 Because the statute

obligates dissolved LLCs to make provisions for claims only “to the extent of assets

therefor,”156 an LLC “can dissolve in compliance with the LLC Act without [making

such provisions] [] if it had no assets.”157

153 6 Del. C. § 18-804(b)(2). 154 Id. § 18-804(b)(3). 155 Capone v. LDH Mgmt. Hldgs. LLC, 2018 WL 1956282, at *8 (Del. Ch. Apr. 25, 2018) (citing Robert L. Symonds, Jr. & Matthew J. O’Toole, Symonds & O’Toole on Delaware Limited Liability Companies § 16.06[E][2][c][ii] (2d ed. 2016)). 156 6 Del. C. § 18-804(b). 157 Post-Trial Op. at *3 (citing 6 Del. C. § 18-804); see also Soroof Trading Dev. Co., Ltd. v. GE Fuel Cell Sys., LLC, 842 F. Supp. 2d 502, 520 (S.D.N.Y. 2012) (“Because an LLC is obligated to make provision for claims only ‘to the extent of assets available therefor,’

29 Pursuant to Section 18-203, a certificate of cancellation should only be filed

“upon the dissolution and the completion of winding up of a limited liability

company.”158 If RWG had assets, it did not properly wind up before filing its

certificate of cancellation. And “[i]f an LLC is not wound up in accordance with the

LLC Act, this Court ‘may nullify the certificate of cancellation, which effectively

revives the LLC and allows claims to be brought by and against it.’”159

1. The Standard The outcome of the Motion turns on whether RWG had assets it failed to set

aside to compensate plaintiffs in pending or likely claims when it dissolved.

Petitioner relies on the Report’s identification of unexhausted insurance policies and

litigable claims. The Intervenors contend Petitioner must additionally show those

assets offer the Company value in the form of coverage or compensation for pending

or likely claims.

GEFCS was not wound up in contravention of Delaware law when, lacking any real assets, it did not make adequate provision for Soroof’s claims.” (quoting 6 Del. C. § 18-804(b))); Novartis Corp. v. Webvention Hldgs. LLC, 2015 WL 6669158, at *7 (D. Md. Oct. 28, 2015) (noting that “[i]f there are insufficient assets, such claims and obligations shall be paid or provided for to the extent of assets available” (citing 6 Del. C. § 18-804(b))). 158 6 Del. C. § 18-203. 159 Capone, 2018 WL 1956282, at *7 (quoting Matthew v. Laudamiel, 2012 WL 605589, at *22 n.148 (Del. Ch. Feb. 21, 2012)); see also Metro Commc’n Corp. BVI v. Advanced Mobilecomm Techs. Inc., 854 A.2d 121, 138 (Del. Ch. 2004). 30 Petitioner argues her nullification claim does not and should not inspire

questions of insurance coverage. 160 Citing In re Texas Eastern Overseas, Inc., she

asserts that “under Delaware law, ‘[i]t is not the function of [a] Court within a § 279

action [to appoint a receiver] to resolve any insurance coverage dispute.’”161 That

is so due to the lower good cause standard for appointing a receiver. 162 Texas

Eastern teaches that the good cause inquiry is a narrow one: all that is required is “a

problem or opportunity to be resolved or pursued, and a reasonable likelihood that

some positive outcome would result.”163 Texas Eastern explained a proceeding for

the appointment receiver “is not an efficient venue for resolving whether a receiver

has any definitive claim to [an] asset” or “the merits of any [] claim against [that]

asset[].” 164 I followed that lower standard when I appointed the Receiver in view of

Petitioner’s showing that it was reasonably likely RWG still had unexhausted

insurance policies. 165

160 Pet’r’s Reply Br. 14. 161 Id. (quoting Tex. E. Overseas, 2009 WL 4270799, at *5 n.37). 162 See 8 Del. C. § 279 (stating that the Court of Chancery may appoint a receiver over a dissolved corporation “on application of . . . any [] person who shows good cause therefor”); 6 Del. C. § 18-805 (stating that the Court of Chancery may appoint a receiver over a dissolved LLC “on application of . . . any [] person who shows good cause therefor”). 163 Tex. E. Overseas, 2009 WL 4270799, at *5 n.39. 164 Id. 165 Post-Trial Op. at *4–5. 31 But Petitioner’s current ask, to nullify a certificate of cancellation, triggers a

more nuanced inquiry under a higher evidentiary standard. In In re Krafft-Murphy

Co., our Supreme Court held that a receiver may be appointed under 8 Del. C. § 279,

the corporate analogue to 6 Del. C. § 18-805, over a corporation “whose assets

consist solely of unexhausted liability insurance policies.” 166 “[C]ontingent

contractual rights, such as unexhausted insurance policies, constitute ‘property’ of a

dissolved corporation, so long as those rights are capable of vesting.”167 There, as

here, the dissolved company faced asbestos-related personal injury claims. 168 The

company’s insurance policies obligated the insurers to defend the company “in suits

for damages covered by the policies” and to indemnify it “against covered third party

claims.”169 That coverage was unexhausted.170 The Supreme Court observed that

“[b]ecause the Corporation is exposed to asbestos-related liabilities, those policies

represent significant potential indemnification value to the Corporation.”171 And it

166 82 A.3d 696, 701 (Del. 2013). 167 Id. at 698; see also Tex. E. Overseas, 2009 WL 4270799, at *6 (appointing a receiver under 8 Del. C. § 279 over a dissolved corporation based on a “reasonable likelihood . . . that [the company] ha[d] undistributed assets in the form of rights under one or more insurance policies”); cf. Addy v. Short, 89 A.2d 136, 140 (Del. 1952) (finding that “wholly contingent” rights, such as a possibility of reverter, constitutes the “unfinished business” of a corporation). 168 Krafft-Murphy, 82 A.3d at 698. 169 Id. at 699. 170 Id. 171 Id. at 704 (citing Addy, 89 A.2d at 140). 32 concluded that “because the Corporation held those policies before it dissolved, they

constitute ‘property’ of the Corporation within the purview of § 279.” 172

I read Krafft-Murphy to offer two considerations in determining whether

certain contingent rights, such as insurance policies and litigable claims, constitute

assets within the meaning of Section 18-804. First, the contingent rights must be

“capable of vesting.” 173 In Krafft-Murphy, the Supreme Court concluded

“contingent contractual rights constitute ‘property’ . . . if they possibly could vest at

a future time.”174 Such rights would never vest if they do not belong to the dissolved

company in the first place—i.e., if the dissolved company is not an insured under

the policies at issue. Second, the contingent rights should “represent significant

potential indemnification value” to the company.175 There is no reason to revive a

dissolved company if its purported assets offer no indemnification value—i.e., if

they cannot reasonably provide compensation for pending or likely claims. If a

policy offers no possibility of recovery because RWG is not an insured or because

172 Krafft-Murphy, 82 A.3d at 704 (citing Addy, 89 A.2d at 141). 173 Krafft-Murphy, 82 A.3d at 698, 703, 705. 174 Id. at 701. In Krafft-Murphy, it was undisputed the dissolved corporation was an insured under the policies at issue. Against that factual backdrop, the Supreme Court examined whether “the statutory provisions governing dissolution (i.e., §§ 278–282) operate as a general statute of limitations that time-bars all third party claims against a dissolved corporation after the limitations period expires,” such that the right to recover under the insurance policies on those claims “would never vest.” Id. at 701–02. 175 Id. at 704 (citing Addy, 89 A.2d at 140). 33 the policy does not cover the claim at issue, it does not constitute a contingent right

capable of vesting that represents significant potential indemnification value.

I turn to the policies the Receiver identified to determine if any afford RWG

a possibility of recovery.

2. Insurance Policies

The Report identifies thirty-three insurance policies issued to WG&M,

Wisconsin Gasket DE, or RWG Co.176 Petitioner has failed to prove by a

preponderance of the evidence that two of those policies exist. For policies issued

to WG&M before the Asset Sale, I conclude the evidence is insufficient to establish

RWG’s predecessor, Wisconsin Gasket DE, acquired any of the pre-Asset Sale

policies by contract. And I conclude the evidence is insufficient to establish any of

the post-Asset Sale policies could indemnify or defend RWG against pending or

likely claims.

a. Petitioner Failed To Prove Two Policies Exist. Petitioner’s burden of proving that the coverage rights under the insurance

policies are capable of vesting includes the burden of proving those policies exist.177

176 See Report at App’x D. 177 See Tyson Foods, Inc. v. Allstate Ins. Co., 2011 WL 3926195, at *7 (Del. Super. Aug. 31, 2011) (“Plaintiffs are required to demonstrate both the existence and terms of the missing policies by a preponderance of the evidence.”); Tenneco Auto. Inc. v. El Paso Corp., 2004 WL 3217795, at *14 (Del. Ch. Aug. 26, 2004) (“In a typical coverage case, the insured must demonstrate the existence of a policy and that the claims fall within the terms of the policy . . . .”). 34 The Intervenors argue Petitioner failed to carry that burden for two of the policies

identified in the Report: a Continental excess policy, and a Travelers umbrella

policy.178

Petitioner and the Receiver claim RWG has insurance rights under a

Continental policy covering the period from September 20, 1978 through December

5, 1978.179 But the only evidence speaking to its existence is a series of letters

between Wisconsin Gasket DE and Continental between 1982 and 1990, and an

internal memo dated April 21, 1982. 180 Those communications indicate the policy’s

existence is unsubstantiated.

By letter to Continental dated February 23, 1982, Wisconsin Gasket DE

inquired about a policy it was “unable to find”: “Policy 142-74-37, which was in

effect from 09/20/78 through 12/05/78.”181 Referencing that inquiry, an internal

memo by a Continental claims coordinator confirmed that “[i]n checking here with

our record storage in home office, they have no record of [Policy 142-74-37].”182 It

also confirmed the claims coordinator “checked with [Continental’s] Milwaukee

branch where this would have been written through and they have no copy of this

178 See Continental Opp. Br. 19–21; DCo Opp. Br. 28 n.8. 179 See Report at App’x D. 180 JX 8; JX 10; JX 13 at RESP0003411. 181 JX 8. 182 JX 10. 35 particular policy in question either.”183 No one at Wisconsin Gasket DE or

Continental could find this policy.184

The Receiver also identifies an umbrella policy issued by Travelers, with a

policy period running from December 5, 1981 through December 5, 1982.185 The

Report does not identify its policy number, include a copy of the policy in the

Receiver’s exhibits, or offer any explanation as to where this policy came from.186

Petitioner has failed to prove this umbrella policy exists, let alone that it provides

any coverage for RWG.

Petitioner has failed to prove either of these alleged policies were assets of the

Company when it dissolved.

b. The Pre-Asset Sale Insurance Policies Do Not Constitute Assets of RWG.

Before the Asset Sale, WG&M had twenty-one insurance policies providing

primary, excess, and umbrella coverage for asbestos-related personal injury

183 Id.; see also JX 13 at RESP0003411 (August 23, 1990 letter from Continental to Wisconsin Gasket DE confirming it did not have any record of the alleged policy). 184 The alleged policy remained unfound when Continental conducted another policy search in 2023, in response to a subpoena from the Receiver. D.I. 257, Transmittal Affidavit of Douglas D. Herrmann in Support of Continental Casualty Company’s Brief in Opposition to Petitioner’s Motion to Nullify Cancellation of Reinz Wisconsin Gasket, LLC and Request to Expand Receiver’s Authority, Ex. A ¶ 6. 185 See Report at App’x D. 186 Id. (listing “N/A” for the columns “Ex. No.” and “Policy No.” in connection with the alleged Travelers umbrella policy). 36 liability.187 It is undisputed RWG is not and has never been a named insured on any

of the pre-Asset Sale policies. These policies can only be RWG assets if Wisconsin

Gasket DE acquired WG&M’s rights to coverage in the Asset Sale.

The proper interpretation of the Purchase Agreement is a question of law.188

The Purchase Agreement chose Wisconsin law.189 In Wisconsin, “contracts must be

construed as they are written.”190 “If the contract is unambiguous, [the Court’s]

attempt to determine the parties’ intent ends with the four corners of the contract,

without consideration of extrinsic evidence.” 191 “A term or provision in a contract

is not ambiguous merely because it is general enough to encompass more than one

interpretation; rather, [courts] seek to ascertain its meaning by looking at the intent

187 See Id. WG&M had additional general comprehensive liability policies issued by Lumbermens. But given Lumbermens’ liquidation in 2013, the Receiver concedes that “Lumbermens’ liquidation forecloses the Lumbermens policies themselves as assets.” Report at 46 n.12 (citing Post-Trial Op. at *9). 188 E.g., Paul v. Deloitte & Touche, LLP, 974 A.2d 140, 145 (Del. 2009). 189 Purchase Agreement § 12.13 (“The terms and provisions of this Agreement shall be governed by the laws of the State of Wisconsin.”). 190 Columbia Propane, L.P. v. Wis. Gas Co., 661 N.W.2d 776, 783 (Wis. 2003); see also Briggs & Stratton Power Prods. Gp., LLC v. Generac Power Sys., Inc., 796 N.W.2d 234, 237 (Wis. Ct. App. 2011); Raasch v. City of Milwaukee, 750 N.W.2d 492, 497 (Wis. Ct. App. 2008). Huml v. Vlazny, 716 N.W.2d 807, 820 (Wis. 2006) (citing Goldstein v. Lindner, 648 191

N.W.2d 892, 896 (Wis. Ct. App. 2002)). 37 of the contracting parties.”192 In so doing, courts will construe a contract “as a whole

in order to give each of its provisions the meaning intended by the parties.” 193

Petitioner and the Receiver lean heavily on Section 1.1, which defines the

“[a]ssets to be [s]old and [p]urchased” at closing. 194 Section 1.1 provides:

[WG&M] hereby agrees to sell, and at the Closing (as hereinafter defined) will transfer, convey, assign and deliver to [Wisconsin Gasket DE], and [Wisconsin Gasket DE] hereby agrees to purchase, and at the Closing will acquire from [WG&M], on the terms and subject to the conditions of this agreement all assets, properties and business of [WG&M] of every kind and nature, tangible and intangible, wheresoever located, and whether or not recorded on the books of [WG&M] (“Assets”) which are owned by [WG&M] as the same shall exist on the Closing Date. 195

Section 1.1 goes on to provide a nonexhaustive list of assets to be transferred. That

list includes cash, inventories, real property, equipment, claims intellectual property,

and “rights under contracts, including all outstanding and unfulfilled purchase

(vendor) and sales (customer) orders, agreements with agents or consultants,

Columbia Propane, 661 N.W.2d at 783 (citing Mattheis v. Heritage Mut. Ins. Co., 487 192

N.W.2d 52, 54 (Wis. Ct. App. 1992)). 193 McCullough v. Brandt, 148 N.W.2d 718, 720 (Wis. 1967) (citing Ketay v. Gorenstein, 53 N.W.2d 6, 7 (Wis. 1952)); see also Maas v. Ziegler, 492 N.W.2d 621, 624 (Wis. 1992) (“A construction which gives reasonable meaning to every provision of a contract is preferable to one leaving part of the language useless or meaningless.” (citing Stanhope v. Brown Cnty., 280 N.W.2d 711, 722 (Wis. 1979))). 194 Purchase Agreement § 1.1. 195 Id. 38 licenses, leases, labor agreements and maintenance and service agreements.”196 The

list makes no mention of insurance policies.

The Purchase Agreement mentions insurance policies for the first time in its

representations and warranties section, specifically Section 6.1(g). WG&M

represented:

Exhibit “G” annexed hereto contains a description of all policies of insurance maintained by [WG&M] covering fire and extended coverage, comprehensive general liability, product liability and worker’s compensation. No notice of termination with respect to said insurance has been sent or received by [WG&M], and [WG&M] has not received any report from any of its insurance carriers within the past year which requires any material change in its properties or operations which has not been or will not on or prior to the Closing Date be complied with. All such policies of insurance described on Exhibit “G” are transferrable to [Wisconsin Gasket DE] and at the Closing will be transferred to [Wisconsin Gasket DE]. 197

The Receiver has not located Exhibit G.198 The Purchase Agreement offers no

evidence of what policies were transferred.

If I were to accept Section 6.1(g)’s representation as evidence that all of

WG&M’s policies were listed on Exhibit G, and if I were to accept its representation

196 Id. §§ 1.1(a)–(i). 197 Id. § 6.1(g). 198 Report at 32 (“Receiver has been unable to locate a copy of Exhibit G.”). 39 that they were all transferrable,199 Petitioner would still not meet her burden.

Petitioner and the Receiver contend Section 1.1 alone effectuated the transfer of

199 Section 6.1(b) required WG&M to “obtain[] and deliver[]” consents for “agreements or leases which by their terms are not assignable by [WG&M] without the consent of the other party.” Purchase Agreement § 6.1(b). Most of WG&M’s policies contained an anti- assignment clause barring coverage for assignees unless the insurer consented to the assignment. See RX 73; RX 74; RX 75; RX 76; RX 77; RX 78; RX 79; RX 80; RX 81; RX 82; RX 83; RX 84; RX 85; RX 86; RX 87; RX 89; RX 90; RX 91; Fochs Aff. Ex. D. There is no evidence WG&M sought and obtained consent to transfer any assets that were not assignable without third-party consent. See Fochs Aff. ¶ 4 (“Nationwide has not located any records suggesting that [] Wausau was ever contacted regarding its consent to transfer the Wausau Policies from [WG&M] to [Wisconsin Gasket DE], as part of the 1981 asset sale from [WG&M] to Wisconsin Gasket DE. Additionally, Nationwide has not located any records indicating Wausau approved any such transfer.”). Wausau raised the anti-assignment clauses, arguing they precluded their assignment without Wausau’s consent. Wausau Opp. Br. 2, 8–9. I read Wisconsin precedent to provide that anti-assignment clauses in occurrence-based policies are unenforceable as applied to post-loss assignments. In line with a majority of jurisdictions, including Delaware, Wisconsin adheres to the principle that “policies prohibiting assignments of the policy, except with the consent of the insurer, apply only to assignments before loss, and do not prevent an assignment after loss.” Pepsi-Cola Metro. Bottling Co., Inc., 979 NW.2d 627, 633 (Wis. Ct. App. 2022) (citation omitted); see also In re Viking Pump, Inc., 148 A.3d 633, 649–52 (Del. 2016). The rationale underlying the majority rule is twofold. First, “once the insured-against loss has occurred, the policy-holder essentially is transferring a cause of action rather than a particular risk profile.” Globecon Gp., LLC v. Hartford Fire Ins. Co., 434 F.3d 165, 171 (2d Cir. 2006). Second, when the loss occurs prior to assignment, the risk profile of the assignee is immaterial. The loss has already occurred; the insurer is simply “covering the risk it originally contracted to insure.” Viking Pump, 148 A.3d at 651–52. Wausau relies on Red Arrow Products Co., Inc. v. Employers Insurance of Wausau to argue that any purported transfer of insurance rights in the Asset Sale was barred by the anti-assignment clauses. See Wausau Opp. Br. 18 (citing 607 N.W.2d 294, 303 (Wis. Ct. App. 2000)). Red Arrow indeed states that that such clauses “make[] clear that without Wausau’s permission, no assignee or transferee has any rights to any benefits under the Wausau policies.” 607 N.W.2d at 299 (citing Loewenhagen v. Integrity Mut. Ins. Co., 473 N.W.2d 574, 577 (Wis. Ct. App. 1991)). But Pepsi-Cola clarified that Red Arrow’s language on the effect of anti-assignment clauses on post-loss assignments was dicta. 979 N.W.2d at 637. And it reaffirmed Wisconsin’s adherence to the majority rule that anti-

40 WG&M’s insurance policies to Wisconsin Gasket DE.200 But reading the Purchase

Agreement in its entirety, in view of Wisconsin precedent, shows that is not so.

Section 1.1 is framed in the future tense: it lays out the assets that “[WG&M]

will transfer, convey, assign and deliver to [Wisconsin Gasket DE] . . . on the Closing

Date.”201 The next section of the Purchase Agreement, Section 1.2, recognizes that

a transfer is effectuated by separate instruments, and required WG&M to execute

the necessary instruments by the closing date. 202 Specifically, Section 1.2 required

WG&M to deliver at closing “[s]uch deeds, bills of sale, endorsements, assignments,

and other good and sufficient instruments of conveyance and transfer . . . as shall be

effective to vest in [Wisconsin Gasket DE] all of [WG&M’s] right, title and interest

in and to the assets” to be sold. 203

Wisconsin law looks to those instruments as “the operative agreement[s] that

actually effectuate[] [a] transfer” of rights under insurance policies.204 Pepsi-Cola

assignment clauses in occurrence-based policies are unenforceable as to post-loss assignments, “provided, of course . . . that the assignment itself was otherwise valid.” Id. at 634 (citation omitted). 200 See Report at 32 (“Section 1.1 specifically transferred assets . . . . Therefore, the absence of Exhibit G—and, for that matter, the contents of Exhibit G—is immaterial.”). 201 Purchase Agreement § 1.1 (emphasis added). 202 Id. §§ 1.2(a), (b). 203 Id. § 1.2(a). 204 Pepsi-Cola, 979 N.W.2d at 639 (citing Bank of Am. NA v. Neis, 835 N.W.2d 527, 541 (Wis. Ct. App. 2013), which cites McDonald v. Nat’l Enters., Inc., 547 S.E.2d 204, 210 (Va. 2001)). 41 Metropolitan Bottling Company, Inc. v. Employers Insurance Company of Wausau

makes that clear. 205 Pepsi-Cola considered whether decades-old insurance policies

covered asbestos claims against a company that, like RWG, was the successor to an

acquiror.206 The parties to the acquisition signed a reorganization agreement calling

for the transfer of “substantially all of the property, assets and business” of the seller,

along with specified liabilities. 207 At closing, they signed a separate “Bill of Sale

and General Assignment” conveying, among other things, “all” of the seller’s “rights

under contracts[] [and] insurance policies.”208 The Wisconsin Supreme Court

observed that “the Bill of Sale is the operative agreement that actually effectuated

the transfer of all of [the seller’s] rights—including its rights under the [insurance]

policies.”209 And it looked only to that document as evidence of which insurance

policies were transferred.210 Under Pepsi-Cola, Section 1.1 of the Purchase

205 979 N.W.2d at 630, 638–39. 206 Id. 207 Id. 208 Id. 209 Id. at 639 (citing Bank of Am. NA v. Neis, 835 N.W.2d at 541, which cites McDonald, 547 S.E.2d at 210 (noting that a bill of sale and assignment of loans was “an operative legal document that embodies and evidences [a] conveyance”)); see also Cooper Indus., LLC v. Columbia Cas. Co., 2018 WL 1770260, at *1 (N.J. Super. Ct. App. Div. Apr. 13, 2018) (noting that distributions of assets, including insurance rights, were “effectuated by Bills of Sale”). 210 Pepsi-Cola, 979 N.W.2d at 639 (“The contents of the schedule referenced in the Reorganization Agreement would only be relevant if the Bill of Sale stated that [the acquiror] only acquired the contract rights identified on the Schedule. The use of the term

42 Agreement alone does not establish Wisconsin Gasket DE effectively acquired the

pre-Asset Sale policies.

Petitioner has not identified any instruments transferring any policy as

contemplated by Section 1.2 and executed in the Pepsi-Cola transaction. Even

interpreting Section 1.1 as evidence of the parties’ intent to transfer all of WG&M’s

insurance policies, Petitioner has failed to prove those policies transferred to

Wisconsin Gasket DE by contract. 211 Petitioner has not shown the pre-Asset Sale

policies are “capable of vesting” and “represent significant potential indemnification

‘all’ in the Bill of Sale expressed [the seller’s] intent to transfer all contract rights to [the acquiror].”). 211 The Report vaguely suggests that “even assuming the 1981 Purchase Agreement did not expressly transfer the insurance policies,” the right to indemnity under the pre-Asset Sale policies transferred to Wisconsin Gasket DE by operation of law. Report at 34–35. Specifically, it suggests Wisconsin Gasket DE might have succeeded to WG&M’s liabilities, and that where that occurs, “courts across the country have held that the right to insurance coverage can transfer as a matter of law from a predecessor to a successor even if the policies are not specifically listed on the pertinent transactional documents.” Report at 34–38. The Intervenors explained Red Arrow explicitly rejected the Report’s theory. DCo Opp. Br. 25; Continental Opp. Br. 17–18; Wausau Opp. Br. 12–13; see 607 N.W.2d at 299–303 (declining to adopt the holding in N. Ins. Co. of N.Y. v. Allied Mut. Ins. Co., 955 F.2d 1353 (9th Cir. 1992)). Petitioner’s briefing does not address a transfer by operation of law at all, or respond to the Intervenors. Petitioner waived any argument to that effect. See Emerald P’rs v. Berlin, 726 A.2d 1215, 1224 (Del. 1999) (“Issues not briefed are deemed waived.”). 43 value,”212 such that they constitute assets of the Company within the purview of

Section 18-804.213

c. The Post-Asset Sale Insurance Policies Do Not Constitute Assets Of RWG.

Turning to the post-Asset Sale insurance policies, the Report identifies ten

policies issued to Wisconsin Gasket DE and RWG Co.: (1) eight workers’

compensation policies issued by Wausau and Travelers, with policy periods between

1986 and 1990,214 and (2) two umbrella policies issued by Travelers, with policy

212 Krafft-Murphy, 82 A.3d at 703, 704. 213 Even if Section 1.1 alone offers sufficient evidence of transfer, no policy that could have transferred in the Asset Sale represents any “indemnification value.” See Krafft-Murphy, 82 A.3d at 704. So even if Wisconsin Gasket DE effectively acquired the pre-Asset Sale policies by contract, they cannot constitute RWG assets within the purview of Section 18- 804. Most of the pre-Asset Sale policies cover periods before 1960, and would only apply to occurrences predating Cook’s alleged exposure. See supra n.12 and accompanying text. The remaining four are umbrella and excess policies that do not provide coverage until the underlying liability limits have been exhausted. The Continental excess policy requires $1,500,000 to have been paid out on a personal injury claim before coverage attaches. See RX 88. The three Travelers umbrella policies require $500,000 to have been paid out on a personal injury claim before coverage attaches. See RX 89; RX 90; RX 91. All four excess and umbrella policies list Kemper as their underlying insurer. Kemper would be called Lumbermens, and Lumbermens would liquidate. See JX 45; JX 144 at RESP0007443. Petitioner has offered no evidence or argument about how these underlying limits could be exhausted in the absence of a solvent underlying insurer. See infra Part II.A.2.c. 214 RX 69 (Travelers policy covering a policy period from September 1, 1986 through September 1, 1987); RX 94 (Wausau policy covering a policy period from September 1, 1986 through September 1, 1987); RX 70 (Travelers policy covering a policy period from September 1, 1987 through September 1, 1988); RX 95 (Wausau policy covering a policy period from September 1, 1987 through September 1, 1988); RX 71 (Travelers policy covering a policy period from September 1, 1988 through September 1, 1989); RX 96 (Wausau policy covering a policy period from September 1, 1988 through September 1,

44 periods between 1982 and 1984.215 I address both categories in turn. I conclude

Petitioner has failed to prove the post-Asset Sale insurance policies constituted

assets of RWG when it dissolved.

The workers’ compensation policies do not qualify as assets of RWG within

the meaning of Section 18-804. They do not cover Petitioner’s claim, as Petitioner’s

late husband was not employed by Wisconsin Gasket DE. 216 They do not cover the

other pending claims against RWG, which are third-party asbestos-related claims.

Petitioner says nothing about how the workers’ compensation policies could

otherwise offer RWG any “potential indemnification value” in view of pending or

likely claims. 217

The umbrella policies do not offer any value either. The umbrella policies

obligate Travelers to “indemnify the insured for ultimate net loss in excess of the

applicable underlying limit which the insured shall become legally obligated to pay

as damages because of . . . [p]ersonal [i]njury . . . to which this policy applies, caused

1989); RX 97 (Travelers policy covering a policy period from September 1, 1989 through September 1, 1990); RX 98 (Wausau policy covering a policy period from September 1, 1989 through September 1, 1990). RX 92 (covering a policy period from December 5, 1982 through December 5, 1983); 215

RX 93 (covering a policy period from December 5, 1983 through February 1, 1984). 216 JX 93 ¶¶ 65–66. 217 Krafft-Murphy, 82 A.3d at 704. 45 by an occurrence anywhere in the world.”218 The “applicable underlying limit” is

defined as “the amount of the applicable limits of liability of the policies of

Underlying Insurance . . . less the amount or amounts, if any, by which any aggregate

limit so stated has been reduced solely by payment of claims in respect of personal

injury . . . .”219 The policies state that “[Travelers’] liability under this policy for

ultimate net loss with respect to any occurrence . . . shall not attach until the amount

of the applicable underlying limit has been paid by or on behalf of the insured.”220

They also provide that “the limits of liability of any such policy of Underlying

Insurance shall be deemed applicable irrespective of . . . the inability of the

underlying insurer to pay by reason of bankruptcy or insolvency.” 221

That language is unambiguous.222 Travelers’ duty to indemnify does not

attach unless and until the remaining applicable limits of the underlying insurance

have been exhausted by covered personal-injury payments. The umbrella does not

drop down by virtue of the underlying insurer’s “bankruptcy or insolvency.”223

218 RX 92 § 2.1; RX 93 § 2.1. 219 RX 92 § 5.3(a); RX 93 § 5.3(a). 220 RX 92 § 6.5; RX 93 § 6.5. 221 RX 92 § 5.3; RX 93 § 5.3. 222 See Cont’l W. Ins. Co. v. Paul Reid, LLP, GPS, Inc., 715 N.W.2d 689, 692 (Wis. Ct. App. 2006) (“[W]hen a policy’s language is unambiguous, we apply it as written, without resorting to rules of construction.” (citing Folkman v. Quamme, 665 N.W.2d 857, 871 (Wis. 2003))). 223 RX 92 § 5.3; RX 93 § 5.3. 46 Each umbrella policy lists an underlying Lumbermens primary policy with an

aggregate liability limit of $500,000.224 For umbrella coverage to kick in, $500,000

per underlying insurance policy must be exhausted—i.e., “reduced solely by

payment of claims in respect of personal injury.” 225 Petitioner cites to no evidence

indicating the underlying primary policy limits have been so exhausted.

The Receiver hypothesizes an easy way out of this problem: “RWG could pay

it. Another insurer could pay it. A third-party could pay it.”226 But this hypothesis

finds no basis in the record. Petitioner offers no evidence suggesting RWG has any

capital on hand to exhaust the underlying primary policy limits. DCo has maintained

throughout this litigation that RWG lacks capital, 227 and certainly neither Petitioner

nor the Receiver has found any.228 Petitioner identifies no other primary or lower-

level excess policies covering the same policy periods, and capable of making

payments on covered claims. Based on the Report, there do not seem to be any. And

224 RX 92 at RWG_TRAV000072; RX 93 at RWG_TRAV000115. The umbrella policies also list an underlying automotive insurance policy and an employers’ liability policy. The liability limits of those underlying policies, which do not cover asbestos-related personal- injury claims, are inapplicable here. See RX 92 at RWG_TRAV000072; RX 93 at RWG_TRAV000115. 225 RX 92 § 5.3(a); RX 93 § 5.3(a). 226 Report at 47. 227 See, e.g., Stringham Tr. 170 (“Q. [RWG] had no money? A. Correct. Q. It had no ability to pay its bills? A. That’s correct.”). 228 See Pet’r’s Opening Br. 7 (“RWG also knew it was insolvent when it dissolved.”). 47 Petitioner offers no context for the assertion that some unidentified third party can

step in.

From there, Petitioner points to Travelers’ duty to defend.229 While an

insurer’s duty to defend is ordinarily broader than its duty to indemnify,230 the

existence and contours of that duty remain bounded by the “language in the

insurance contract.” 231 Petitioner contends Travelers’ duty to defend is valuable to

RWG because, under Section 2.3(a) of the umbrella policies, it would necessarily

attach in the absence of a collectible underlying insurance policy. 232 I do not read

Section 2.3(a) that way. Section 2.3(a) commits Travelers to “defend any suit

seeking damages which are not payable on behalf of the insured under the terms of

the policies of Underlying Insurance . . . or any other available insurance,” but which

229 Hr’g Tr. 13–14 (contending the “obligation [to defend] attach[es] in the absence of an underlying policy”); see Johnson Controls, Inc. v. London Mkt., 784 N.W.2d 579, 586 (Wis. 2010) (noting that the “duty to indemnify and the duty to defend are separate contractual obligations” (citing Radke v. Fireman’s Fund Ins. Co., 577 N.W.2d 366, 369 (Wis. Ct. App. 1998), overruled in part on other grounds by Marks v. Houston Cas. Co., 881 N.W.2d 309 (Wis. 2016))). 230 See Red Arrow, 607 N.W.2d at 298 (“An insured’s duty to defend is broader than its duty to indemnify because the duty to defend exists when it is merely arguable that the policy in question provides coverage.” (citing Radke, 577 N.W.2d at 369)); Acuity v. Chartis Specialty Ins. Co., 861 N.W.2d 533, 539–40 (Wis. 2015) (“[T]he duty to defend depends upon the nature, not the merits, of the claim against the insured, while the duty to indemnify depends on the merits of the claim.” (citations omitted)). 231 Johnson Controls, Inc., 784 N.W.2d at 586 (internal quotation marks and citation omitted). 232 Hr’g Tr. 13–14. 48 “are payable under the terms of Section 2.1,” due to either of the following

circumstances: (1) because “such damages are not covered thereunder,” or (2)

because of “exhaustion of an underlying aggregate limit of liability by payment of

claims.”233

The first circumstance is inapplicable because damages for asbestos-related

personal-injury claims are “covered” by the underlying insurance. I read Petitioner’s

argument to suggest such damages cannot be “covered” by the underlying

Lumbermens policies due to Lumbermens’ liquidation. But “the terms ‘covered’

and ‘not covered’ refer to whether the policy insures against a certain risk, not

whether the insured can collect on an underlying policy.”234 “Insurance policies

‘cover’ what they say they cover.”235 The underlying Lumbermens primary policy,

by its terms, plainly covers damages for asbestos-related personal-injury claims.236

233 JX 92 § 2.3(a); RX 93 § 2.3(a). 234 Pergament Distribs., Inc. v. Old Republic Ins. Co., 513 N.Y.S.2d 467, 468 (N.Y. App. Div. 1987) (citations omitted); St. Paul Travelers Cos., Inc. v. Corn Island Shipyard, Inc., 495 F.3d 376, 385–86 (7th Cir. 2007); Arkwright-Boston Mfrs. Mut. Ins. Co. v. Aries Marine Corp., 932 F.2d 442, 446–47 (5th Cir. 1991); cf. Muehlenbein v. W. Bend Mut. Ins. Co., 499 N.W.2d 233, 237 (Wis. Ct. App. 1993) (“They ask us to interpret the exclusion to allow for excess coverage by implying that a claim is not ‘covered’ if the policy limits are insufficient to provide complete compensation. We reject this interpretation.”). 235 5 Walworth, LLC v. Engerman Contr., Inc., 963 N.W.2d 779, 781 (Wis. Ct. App. 2021) (emphasis added); see also Kemp v. Feltz, 497 N.W.2d 751, 753 (Wis. Ct. App. 1993) (“Whether certain conduct falls within the coverage granted by an insurance policy is an issue governed by the insurance contract’s terms and conditions.” (citing Paape v. N. Assurance Co. of Am., 416 N.W.2d 665, 668 (Wis. Ct. App. 1987))). 236 See JX 11. 49 The second circumstance is inapplicable because, as explained, there is no evidence

the primary insurance layer has been exhausted. Accordingly, Petitioner has not

shown RWG’s rights to indemnity and defense under any of the post-Asset Sale

insurance policies were available to set aside for pending or likely claims when

RWG dissolved.

Petitioner has not offered a preponderance of the evidence to show RWG had

any contingent rights under insurance policies “capable of vesting” and worth

“significant potential indemnification value” when it dissolved. 237

3. Litigable Claims

As a last resort, Petitioner argues RWG possesses contingent rights in the form

of litigable claims. Delaware law treats litigable claims as corporate assets.238 A

familiar example is a derivative claim—a claim belonging to the company and

237 Krafft-Murphy, 82 A.3d at 703, 704. 238 See, e.g., Sehoy Energy LP v. Haven Real Est. Gp., LLC, 2017 WL 1380619, at *1 (Del. Ch. Apr. 17, 2017) (“A cause of action brought on behalf of an entity is an asset of that entity.”); Ellis v. Gonzalez, 2018 WL 3360816, at *1 (Del. Ch. July 10, 2018) (“[C]hoses in action . . . are assets of the corporation.”); Oliver v. Boston Univ., 2006 WL 1064169, at *19 (Del. Ch. Apr. 14, 2006) (“Derivative claims are, of course, assets of the corporation.”); Porter v. Tex. Com. Bancshares, Inc., 1989 WL 120358, at *5 (Del. Ch. Oct. 12, 1989) (“If the company has substantial and valuable derivative claims, they, like any asset of the company, may be valued in an appraisal.”); Nagy v. Bistricer, 770 A.2d 43, 55 n.23 (Del. Ch. 2000) (“To the extent that the entity possessed valuable legal claims, the value of those claims is part of the overall value of the entity.”). 50 asserted on behalf of the company. 239 Against this backdrop, Petitioner argues “[a]ll

this Court needs to determine is whether RWG has good-faith litigable claims.”240

Litigable claims are not valuable assets for all intents and purposes. In re

Primedia, Inc. Shareholders Litigation, the lone authority on which Petitioner relies,

makes this point clear. 241 Primedia itself looked to whether an underlying derivative

claim was “viable” and “material,” so as to confer direct standing on plaintiffs

wishing to challenge a merger based on the board’s failure to secure value for that

derivative claim.242 It explained that “the value of the derivative claim must be

material in the context of the merger,” and “[i]f the underlying derivative action is

not viable, then there is no litigation asset to value or maintain.”243

So too here. Section 18-804’s reach is limited: a litigable claim constitutes an

asset of the Company insofar as it can reasonably provide for pending or likely

claims. And under Krafft-Murphy, contingent rights, including litigable claims,

constitute assets insofar as they are “capable of vesting” and “represent significant

239 See Weinberger v. Lorenzo, 1990 WL 156529, at *2 (Del. Ch. Oct. 12, 1990). 240 Pet’r’s Reply Br. 10; see also Pet’r’s Opening Br. 8–9. 241 67 A.3d 455 (Del. Ch. 2013). 242 Id. at 477–83. 243 Id. at 477. 51 potential [] value.” 244 A certificate of cancellation will not be nullified simply

because one could conjure up a possible litigable claim.

Petitioner has not established RWG holds litigable claims that offer any value.

The Receiver first conjures litigable coverage claims out of the fact that insurance

companies intervened in this action to protect their interests. Those companies had

a legally cognizable interest in policies Petitioner identified as assets. 245 That

interest is not tantamount to a value-producing claim under those policies. To the

contrary, as explained, none of the policies in question offer any value.

Next, the Report states in a single paragraph that “RWG also has litigable

claims for breach of fiduciary duty against its directors and officers[,] and aiding and

abetting claims against DCo and [EUSI].” 246 The Receiver did not detail these

claims in the Report, instead noting he is “available to discuss these claims in

244 Krafft-Murphy, 82 A.3d at 703, 704. 245 D.I. 180; D.I. 251; see In re Reinz Wis. Gasket, LLC, 2023 WL 3300042, at *3 (Del. Ch. May 8, 2023); Tex. E. Overseas, 2009 WL 4270799, at *1; In re Fletcher Constr. Co. of N. Am., 2023-1038-MTZ, D.I. 24; see also Surf’s Up Legacy P’rs, LLC v. Virgin Fest, LLC, 2021 WL 6012782, at *3 (Del. Super. Dec. 16, 2021) (explaining that “standing under Rule 24 turns on whether [the movant’s] claimed interest is one that is legally enforceable”); In re AMC Ent. Hldgs., Inc. S’holder Litig., 2023 WL 2518479, at *2–3 (Del. Ch. Mar. 15, 2023) (“Standing is a requirement for both mandatory and permissive intervention.” (citations omitted)); Flynn v. Bachow, 1998 WL 671273, at *4 n.15 (Del. Ch. Sept. 18, 1998) (“The interest that an intervenor claims must be one cognizable by law; therefore, if the intervenor lacks standing to assert the claim, ipso facto, the intervenor’s interest cannot be recognized.”). 246 Report at 49. 52 camera” due to privilege and work product concerns.”247 Petitioner did not press

these claims or seek any in camera review. Petitioner has not carried her burden to

prove that any alleged fiduciary duty claim could provide value.

In any case, no fiduciary duty is owed to claimants like Petitioner. 248 And any

breach of fiduciary duty owed to RWG and its sole member DCo 249 is largely

exculpated under RWG’s Operating Agreement, so a claim for such a breach would

yield value only in extreme circumstances:

No Member, Manager, or officer shall have any personal obligation for any liabilities of the Company solely by reason of being a Member, Manager or officer, except as provided by law. No Member, Manager or officer shall have any liability to the Company arising out of a transaction, occurrence or course of conduct unless he, she or it has engaged in willful misconduct or a knowing violation of criminal law

247 Id. at 49–50. 248 See Kelly v. Blum, 2010 WL 629850, at *10 (Del. Ch. Feb. 24, 2010) (“[U]nless the LLC agreement in a manager-managed LLC explicitly expands, restricts, or eliminates traditional fiduciary duties, managers owe those duties to the LLC and its members.”). Petitioner asserts she was owed fiduciary duties when RWG entered the “zone of insolvency,” and then once it became insolvent. Pet’r’s Opening Br. 6. Not so. In Delaware, “[t]here is no legally recognized ‘zone of insolvency’ with implications for fiduciary duty claims.” Quadrant Structured Prods. Co., Ltd. v. Vertin, 115 A.3d 535, 546 (Del. Ch. 2015) (citing N. Am. Cath. Educ. Programming Found., Inc. v. Gheewalla, 930 A.2d 92, 94 (Del. 2007)). While “in insolvency creditors become the ultimate risk bearers in LLCs,” fiduciary duties continue to run to the LLC and its members. CML V, LLC v. Bax, 28 A.3d 1037, 1043 (Del. 2011). And in any case, Petitioner is not a creditor of RWG. See Post-Trial Op. at *3–4. 249 JX 46 § 2; see William Penn P’ship v. Saliba, 13 A.3d 749, 756 (Del. 2011) (“[M]anagers of a Delaware limited liability company owe traditional fiduciary duties of loyalty and care to the members of the LLC, unless the parties expressly modify or eliminate those duties in the operating agreement.” (emphasis added)). The Operating Agreement does not contain a fiduciary duty waiver. 53 or has knowingly exceeded the authority granted by or pursuant to this Agreement. 250

Petitioner attempts to work around this issue by shifting from tort to contract,

invoking the implied covenant of good faith and fair dealing. Specifically, she

recites the truism that breaches of the implied covenant cannot be exculpated, and

argues there is “a litigable claim that RWG’s officers and directors acted in bad faith

when actively opposing the interests of claimants.”251

But claimants like Petitioner have no claim for breach of the implied covenant.

The implied covenant entitles a contractual party to expect the other contractual

party to be reasonable in exercising a discretionary right. 252 RWG and DCo

contracted to vest DCo with sole discretion over the decision to dissolve RWG.253

RWG was thus entitled to expect DCo to act reasonably in exercising that discretion.

But the implied covenant does not “establish a free-floating requirement that a party

act in some morally commendable sense,”254 or a “‘free-floating duty . . . unattached

250 JX 46 § 13. 251 Pet’r’s Reply Br. 13. 252 See Johnson & Johnson v. Fortis Advisors LLC, --- A.3d ---, 2026 WL 89452, at *16 (Del. Jan. 12, 2026); Airborne Health, Inc. v. Squid Soap, LP, 984 A.2d 126, 146–47 (Del. Ch. 2009); Amirsaleh v. Bd. of Trade of City of N.Y., Inc., 2009 WL 3756700, at *5 (Del. Ch. Nov. 9, 2009); Gilbert v. El Paso Co., 490 A.2d 1050, 1055 (Del. Ch. 1984), aff’d, 575 A.2d 1131 (Del. 1990). JX 46 §§ 5–(A) (“[T]he Company shall be dissolved upon . . . [t]he election of the 253

Member to dissolve and terminate the Company.”). Allen v. El Paso Pipeline GP Co., L.L.C., 2014 WL 2819005, at *10 (Del. Ch. June 20, 254

2014). 54 to the underlying legal document.’”255 What is “reasonable” or “unreasonable” turns

on “the parties’ original contractual expectations, not a ‘free-floating’ duty applied

at the time of wrong.” 256 The question is whether DCo’s exercise of its discretion

harmed RWG, not tort claimants that are not parties to RWG’s Operating

Agreement. 257

And an implied covenant claim offers RWG no value. “[T]he purpose of the

implied covenant is to ensure that a party to a contract is not prevented ‘from

receiving the fruits of the bargain.’”258 Consistent with that purpose, a claim for

breach of the implied covenant requires “some injury to [a party’s] contractual

interest.” 259 RWG had been inoperative for over a decade when it dissolved, and it

had no assets.260 DCo’s decision to dissolve RWG did not cause it any harm.

For that same reason, an aiding and abetting claim against DCo and EUSI

offers RWG no value. Setting aside the lack of a predicate breach, I see no basis for

255 Dunlap v. State Farm Fire & Cas. Co., 878 A.2d 434, 441 (Del. 2005) (quoting Glenfed Fin. Corp., Com. Fin. Div. v. Penick Corp., 647 A.2d 852, 858 (N.J. Super. Ct. App. Div. 1994)). 256 ASB Allegiance Real Est. Fund v. Scion Breckenridge Managing Member, LLC, 50 A.3d 434, 442 (Del. Ch. 2012) (citing Nemec v. Shrader, 991 A.2d 1120, 1128 (Del. 2010)), rev’d on other grounds, 68 A.3d 665 (Del. 2013). 257 And Petitioner herself has already settled with DCo. Boyle Aff. Ex. 3. Kuroda v. SPJS Hldgs., L.L.C., 971 A.2d 872, 888 (Del. Ch. 2009) (quoting Dunlap, 878 258

A.2d at 442). 259 Kuroda, 971 A.2d at 888–89. 260 See JX 41 at ENT000167; JX 44; Trial Tr. 109. 55 “quantifiable damages that are ‘logically and reasonably related to [a] harm or

injury,’” as required to successfully assert an aiding and abetting claim.”261

Petitioner has not shown RWG holds litigable claims constituting assets

within the purview of Section 18-804.

B. Request To Expand Receiver’s Authority

Petitioner has failed to carry her burden to prove by a preponderance of the

evidence that RWG had assets it failed to set aside for claimants when it dissolved.

As such, I need not address Petitioner’s request allow the Receiver to marshal any

purported assets.

III. CONCLUSION For the foregoing reasons, the Motion is DENIED. The parties shall confer

and submit a stipulated implementing order that addresses the Motion, the

Receiver’s future service, and Continental’s counterclaim consistent with this

opinion.

261 Lake Treasure Hldgs., Ltd. v. Foundry Hill GP LLC, 2014 WL 5192179, at *12 (Del. Ch. Oct. 10, 2014) (quoting In re J.P. Morgan Chase & Co. S’holder Litig., 906 A.2d 766, 773 (Del. 2006)); see also In re Mindbody, Inc., S’holder Litig., 332 A.3d 349, 389 (Del. 2024) (reciting the elements of an aiding and abetting breach of fiduciary duty claim, including “damages proximately caused by the breach”). 56