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The Brief Case for Insurer Standing in Asbestos Bankruptcies
Debtors facing mass-tort asbestos liability frequently challenge their insurers' standing to appear in the debtors' bankruptcy cases. They typically argue that their insurers have no standing because the proposed bankruptcy plan is “insurance neutral.” Debtors contend alternatively that the insurers' standing is limited to specific issues directly affecting the insurance contract, such as whether the debtor may assign policy proceeds notwithstanding anti-assignment provisions contained in the policy. Despite insurers' strong incentives to participate in mass-tort bankruptcies, bankruptcy courts have frequently been willing to suppress insurer objections that the debtor finds inconvenient.
Following the Third Circuit's 2004 decision in Combustion Engineering, it is increasingly clear that insurers have standing at least to ensure that the proposed plan does not directly alter the insurers' contractual rights. Stated differently, insurers can make certain that a proposed plan truly is “insurance neutral.” There is, however, no definition for “insurance neutral” in the Bankruptcy Code. Nor is there any consensus on what it should mean. Faced with uncertainty concerning the scope of insurers' right to participate, debtors and insurers in several recent cases have negotiated “insurance neutrality” stipulations and specifically bargained over the issues as to which the insurers will be heard. See e.g., In re Kaiser Aluminum Corp., Case No. 02-10429 (Bankr. D. Del. Nov. 2005); In re Federal Mogul, Case No. 01-10578 (Bankr. D. Del. 2005). Even in those cases, the debtors have argued that the insurers lack standing to raise arguments specifically preserved in the stipulations. See e.g., Transcript of Jan. 9, 2005 Hearing, In re Kaiser Aluminum, No. 02-10429 (Bankr. D. Del.), at 123:19-24. Nevertheless, putting aside those cases and the inherent compromises they embody, insurers continue to assert standing in their insureds' mass-tort driven bankruptcies.
Over the past year, several decisions have addressed the standing of insurers to participate in the Chapter 11 cases of their insureds. Faced with arguments that a proposed plan is “insurance neutral,” bankruptcy courts have recently tended to adopt one of the following positions: 1) insurers may be heard only on issues that directly alter their contractual rights (e.g., Combustion Engineering and API, Inc.), or 2) insurers have broad-based, but not limitless, standing (e.g., Congoleum). Based on these decisions, insurers should continue to assert their rights to participate in asbestos bankruptcies. Properly read, the applicable law supports broad-based insurer standing, and the current state of “insurance neutrality” fails to address insurers' interests in contesting their insured's liability to underlying claimants.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?