9th Circuit: Bankruptcy Code Trumps Arbitration Proviso In Thorpe, Insurer's Deal

SAN FRANCISCO - A federal bankruptcy court had the discretion to decline to enforce an arbitration provision in a settlement agreement between Thorpe Insulation Co. and one of its insurers because resolution of the insurer's claims for breach of the agreement was a core proceeding in Thorpe's Chapter 11 case and having an arbitrator decide the claims would conflict with the purposes of the U.S. Bankruptcy Code, the Ninth Circuit U.S. Court of Appeals held Jan. 30 in what it called an issue of first impression (Continental Insurance Company v. Thorpe Insulation Company, et al. [In The Matter of: Thorpe Insulation Company], No. 10-55744, 9th Cir.; 2012 U.S. App. LEXIS 1691). Full story on lexis.com