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.
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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