Hess creditors seek dismissal of Virgin Islands bankruptcy

The creditors of a bankrupt Hess Corp subsidiary have asked a U.S. judge to dismiss the company’s bankruptcy case, saying it serves no purpose other than to protect Hess from lawsuits related to asbestos exposure at a Virgin Islands oil refinery. Hess subsidiary HONX filed for Chapter 11 protection in Houston on April 29.

It says it intends to take advantage of the “breathing spell” of a bankruptcy case. The creditors allege that Hess is abusing U.S. bankruptcy laws to dodge asbestos claims. Asbestos at the refinery caused lung disease and cancer, including mesothelioma. The creditors argue that asbestos lawsuits should be allowed to proceed against Hess outside of bankruptcy court.

Hess says bankruptcy offers the best way to reach a “timely and orderly” resolution of all asbestos claims. Hess has never gone to trial in a Virgin Islands asbestos case, settling more than 1,000 cases to date. Fears grew especially acute after the passage of a 2021 local law that expedited trials for claimants that are elderly or in poor health. Hess is “terrified” to face juries in the Virgin Islands, where it has benefited from generous tax breaks.