At one point Blitz held 70 percent of the US market of gas cans. The main reason that it was forced into bankruptcy was because the company was hemorrhaging money from 36 product liability lawsuits for harm caused by the cans. The defective gas cans have caused severe damage to people who unsuspectingly suffered severe burns, usually from explosions. The company, based out of Oklahoma, has an insurance policy, but there is a $1 million deductible before the insurance kicks in. The court papers filed by Blitz in November stated that they had already spent $30 million defending these products liability suits stemming from the defective gas cans, which was a “debilitating expense for the company.The company also estimated it owed $3.5 million in lawyer’s fees over defending these lawsuits.
Blitz filed under Chapter 11 last November, which temporarily stopped all lawsuits against it. Recently, attorneys for Blitz asked the judge at the US Bankruptcy Court in Wilmington, Delaware, to halt all related lawsuits against Wal-Mart as the retailer selling the allegedly defective goods. Wal-Mart is Blitz’s most important customer, so the company wants to protect Wal-Mart and is worried about the increasing number of these products liability suits. The bankruptcy judge refused the request to halt the lawsuits against Wal-Mart.