In a landmark 8-0 decision, the U.S. Supreme Court has ruled that insurance companies have a broad right to object to bankruptcy plans that could impact their liabilities. The case, involving Truck Insurance Exchange v. Kaiser Gypsum Co., Inc., et al., has far-reaching implications for future mass tort bankruptcies, such as those involving the Boy Scouts of America and several Catholic dioceses.
Key takeaways:
- While insurers gain the right to raise complaints, judges still have the final say in proceedings
- Insurers now have “a seat at the table” in bankruptcy cases involving mass-tort liability.
- The ruling provides helpful oversight in mass tort bankruptcies, where claims are often settled quickly with little investigation.
- While insurers gain the right to raise complaints, judges still have the final say in proceedings.
Legal experts predict this decision could be the most consequential tort reform issue of the year, limiting bad behavior when debtors strike deals that leave insurers holding the bag.
What do you think about this ruling? Will it lead to more fairness in bankruptcy proceedings or create unnecessary delays? Share your thoughts with us.
