Monday, May 21, 2007

Insurers Win Asbestos Ruling Against "Prepackaged" Bankruptcy

Article in the Wall Street Journal -- Insurers Win Asbestos Ruling, by Nathan Koppel.  Here's an excerpt:

Insurers scored a win Friday when a New Jersey court held they didn't have to pay asbestos-related claims that had been negotiated as part of a "prepackaged" bankruptcy.

The case, concerning the 2003 bankruptcy of Congoleum Corp., has been followed closely by combatants in the asbestos-litigation arena. Some companies that have faced asbestos liability have tried to control their exposure by filing prepackaged bankruptcies, which are negotiated ahead of a filing, potentially allowing a company to reorganize in an expedited fashion. Critics have argued that asbestos "prepacks" let plaintiffs' lawyers collect damages for dubious asbestos claims at the expense of insurers.

Congoleum is a manufacturer of flooring products. Asbestos-related injury suits against the Mercerville, N.J., company prompted it to file a prepackaged bankruptcy plan under which it agreed to pay more than $200 million in asbestos claims, Friday's ruling said.

Here's the decision: Download congoleum_asbestos_decision.pdf .  The WSJ Law Blog has a related post, Win for Asbestos Insurers, by Nathan Koppel.  Here's a link to the related post from Point of Law.

BGS

http://lawprofessors.typepad.com/mass_tort_litigation/2007/05/insurers_win_as.html

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» Another Congoleum ruling from PointOfLaw Forum
A New Jersey court absolved insurers from liability for asbestos claims from a collusive prepackaged bankruptcy. Nathan Koppel in today's WSJ:Middlesex County Superior Court Judge Nicholas Stroumtsos Jr. concluded that the agreement was the result of c... [Read More]

Tracked on May 21, 2007 2:58:29 PM

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