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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.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
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.
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.
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.
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.