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Non-Debtor Insurance in Asbestos Bankruptcies: What Is the Future?
In the few short years since Fuller-Austin was decided, the use of “prepack” bankruptcies has become a favored approach to resolving asbestos liabilities, often with the threat of a “Fuller-Austin result” as a hammer over the insurers asked to pick up the tab. Here's the drill: A policyholder uses section 524(g) of the Bankruptcy Code to channel its present and future asbestos liabilities to a trust; under policyholder's reorganization plan, the trust is funded in significant part with insurance rights; the insurers cannot object to the plan because it is said not to affect their interests; yet plan confirmation triggers coverage for the entire liability in an amount (often a nine or 10 digit amount) to be determined at a later date. See Fuller-Austin Insulation Co., 2002 WL 31005090 (Cal. Sup. Ct. Aug. 6, 2002) (appeal pending). The pressure this Fuller-Austin play puts on insurers leads many to settle their coverage obligations ' often a rational response to a high-stakes game in which insurers have few sources of leverage.
Seeking to expand both the scope of the 524(g) injunction and the pot of available insurance assets, proponents of some asbestos prepacks have moved to “bolt-on” to pending asbestos bankruptcies various non-debtor liabilities, accompanied by assignments of non-debtor policy rights to pay for them. Such “bolt-ons” were proposed in the Federal Mogul and Combustion Engineering prepacks. A somewhat similar approach emerged in the non-prepack Pittsburgh-Corning bankruptcy. Pittsburgh-Corning differs from the bolt-on prepacks in several important respects, including the broad consensual involvement of many insurers and a significant shared insurance program among the debtor and the non-debtors.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.