Monday, May 21, 2007
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.