LexisNexis® Legal Newsroom
    Mealey's Bankruptcy - Split 9th Circuit Sends Row Over Lawyer's Trust Claims Ban Back To Trial Court

    SAN FRANCISCO - A California federal court must decide on remand whether federal or state law controls - and whether a Ninth Circuit U.S. Court of Appeals decision impacts - two asbestos trusts' attempt to enforce a settlement under which an attorney agreed to stop filing claims with the trusts due to his pattern of presenting unreliable evidence, a divided Ninth Circuit panel held Aug. 14 (Michael J. Mandelbrot, et al. v. J.T. Thorpe Settlement Trust and Thorpe Insulation Company Asbestos Settlement Trust, No. 15-56430, 9th Cir.).

    Mealey's Bankruptcy - Finding That Bankruptcy Asset Sale Bars Take-Home Asbestos Case Stands

    HARRISBURG, Pa. - The Pennsylvania Supreme Court on Sept. 8 declined to review an appellate court's rejection of a widower's attempt to hold a company liable for his wife's death from mesothelioma and finding that the company's "free and clear" purchase of assets in a bankruptcy court auction barred his take-home asbestos exposure claims (Jacqueline S. Wagner, et al. v. Standard Steel LLC, et al., No. 80 EAL 2017, Pa. Sup.).

    Mealey's Bankruptcy - Insurer Cannot Litigate Coverage Dispute In State Court, Bankruptcy Judge Says

    OAKLAND, Calif. - A California federal bankruptcy judge on Aug. 24 denied an insurer's request to sue a company's asbestos trust in state court over the amount of coverage owed for asbestos personal injury claims, issuing a strong rebuke to the insurer's attorneys, who claimed that the trustee knew the claims he submitted to the insurer did not trigger the polices at issue (In re CFB Liquidating Corporation, f/k/a Chicago Fire Brick Co., et al., No. 01-45483, N.D. Calif. Bkcy., 2017 Bankr. LEXIS 2411).

    Mealey's Bankruptcy - Jurisdiction Plainly Lacking For Crane's RICO Claims, Law Firm Tells 7th Circuit

    CHICAGO - A federal court in Illinois correctly dismissed fraud and racketeering claims leveled by frequent asbestos defendant John Crane Inc. (JCI) against two law firms and their principals for lack of jurisdiction because the asbestos cases giving rise to the claims did not occur in Illinois, one of the firms argues in an Aug. 16 brief to the Seventh Circuit U.S. Court of Appeals (John Crane Inc. v. Shein Law Center Ltd., et al., Nos. 17-1809 and 17-1926, John Crane Inc. v. Simon Greenstone Panatier Bartlett, et al., No. 17-1814, 7th Cir.).

    Mealey's Bankruptcy - Rapid-American Protests Insurers' Subpoenas To Claims-Processing Facilities

    NEW YORK - Chapter 11 debtor Rapid-American Corp. and the asbestos claimants in its case asked a New York federal bankruptcy judge on Aug. 15 to stop the debtor's insurers from enforcing subpoenas they issued to six asbestos claims-processing facilities, saying the subpoenas are "facially overbroad and seek material that is wholly irrelevant" to the issues in an insurance coverage adversary action (Rapid-American Corporation, et al. v. Travelers Casualty and Surety Company, et al., No. 15-01095, S.D. N.Y. Bkcy.).

    Mealey's Bankruptcy - Oakfabco Insurer To Pay $4.5 Million To Trust After Battle With Asbestos Claimants

    CHICAGO - An Illinois federal bankruptcy judge on Aug. 4 approved a $4.5 million asbestos insurance coverage dispute settlement between Chapter 11 debtor Oakfabco Inc. and one of its insurers over objections by asbestos claimants' representatives, after the insurer added $1 million to the deal (In re: Oakfabco, Inc., No. 15-27062, N.D. Ill. Bkcy., 2017 Bankr. LEXIS 2201).

    Mealey's Bankruptcy - Insurer Seeks To Force Arbitration Of Coverage Dispute With Garlock

    CHARLOTTE, N.C. - An insurer of an affiliate of former Chapter 11 debtor Garlock Sealing Technologies LLC sued Garlock, its parent and another former debtor affiliate in North Carolina federal court on Aug. 2, seeking to force the Garlock parties to arbitrate a dispute over whether the insurer owes any money to the parties under an excess policy issued in 1983 (Safety National Casualty Corp. v. Garlock Sealing Technologies LLC, et al., No. 3:17-cv-00458, W.D. N.C.).

    Mealey's Bankruptcy - GM's Suit Against Manville Trust Barred By Injunction, Bankruptcy Judge Rules

    POUGHKEEPSIE, N.Y. - General Motors LLC cannot sue Johns-Manville Corp.'s asbestos personal injury trust in Ohio state court to recover money for payments made to a widow because GM's claim for contribution is barred by the decades-old injunction issued in Johns-Manville's Chapter 11 case, a New York federal bankruptcy judge held July 24 (In re Johns-Manville Corporation, et al., No. 82-11656 [General Motors LLC v. Manville Personal Injury Settlement Trust, et al., No. 1:17-ap-1032], S.D. N.Y. Bkcy.).

    Mealey's Bankruptcy - Asbestos Claimants Drop Appeal Due To Failure Of Energy Future's Plan

    WILMINGTON, Del. - Four asbestos claimants battling Chapter 11 debtor Energy Future Holdings Corp. (EFH) over its handling of asbestos claims in its plan to reorganize presented the Delaware federal court on July 21 with a proposed stipulation and order dismissing the claimants' appeal of the plan confirmation, due to EFH's inability to consummate the plan (Shirley Fenicle, et al. v. Energy Future Holdings Corp., No. 17-229, D. Del.).

    Mealey's Bankruptcy - Federal Bankruptcy Judge Strikes Foreign Specialty Reinsurer's $15M Bond

    NEW YORK - A foreign specialty reinsurer must post a new $15 million bond as part of its attempt to arbitrate a coverage dispute in Bermuda, a New York federal bankruptcy judge ruled July 17, granting a defunct brokerage company's motion to strike the current bond as defective (In re: MF Global Holdings Ltd., et al., MF Global Holdings Ltd. as plan administrator, and MF Global Assigned Assets LLC v. Allied World Assurance Company Ltd., et al., Chapter 11 No. 11-15059, Adv. Proc. No. 16-01251, S.D. N.Y. Bkcy.).

    Mealey's Bankruptcy - Court: Res Judicata Bars Wrongful Death Consortium Claim

    LOS ANGELES - A couple's previous asbestos action bars a widow's wrongful death action seeking loss of consortium, a California appeals court held July 11 while also concluding that the judge below properly offset an economic award for funeral and burial expenses with proceeds from settlements with asbestos bankruptcy trusts (Janet Stewart v. Union Carbide Corp., No. B267405, Calif. App., 2nd Dist., Div. 4).

    Mealey's Bankruptcy - Brokerage Company Says Foreign Specialty Reinsurer's $15M Bond Remains Defective

    NEW YORK - A defunct brokerage company argues in its July 11 reply brief with a New York federal bankruptcy court that a foreign specialty reinsurer's $15 million bond as part of the reinsurer's effort to arbitrate a coverage dispute in Bermuda should be struck because the bond is defective (In re: MF Global Holdings Ltd., et al., MF Global Holdings Ltd. as plan administrator, and MF Global Assigned Assets LLC v. Allied World Assurance Company Ltd., et al., Chapter 11 No. 11-15059, Adv. Proc. No. 16-01251, S.D. N.Y. Bkcy.).

    Mealey's Bankruptcy - Bankruptcy Judge Removes Consent Finding In Coverage Dispute Ruling

    CHICAGO - An insurer successfully petitioned an Illinois federal bankruptcy judge to remove a finding in his ruling denying the insurer summary judgment in a coverage dispute with asbestos claimants in the Chapter 11 case of Oakfabco Inc. that the insurer waived its right to object to the ruling, according to a June 29 amended opinion (In re: Oakfabco, Inc., No. 15-27062, N.D. Ill. Bkcy., 2017 Bankr. LEXIS 1856).

    Mealey's Bankruptcy - Law Firm Seeks Dismissal Of John Crane's Appeal Of RICO, Fraud Claims

    CHICAGO - An attempt by frequent asbestos defendant John Crane Inc. to pursue fraud and racketeering claims against two law firms and their founders is barred by the doctrine established in Rooker v. Fid. Trust Co., 263 U.S. 413 (1923), and D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983), one law firm and its principals argue in a June 28 bid to have the Seventh Circuit U.S. Court of Appeals dismiss the action (John Crane Inc. v. Shein Law Center Ltd., et al., Nos. 17-1809 and 17-1926, John Crane Inc. v. Simon Greenstone Panatier Bartlett, et al., No. 17-1814, 7th Cir.).

    Mealey's Bankruptcy - Judge" Foreign Specialty Reinsurance Must Pay $926,000 In Attorney Fees

    NEW YORK - A New York federal bankruptcy judge ruled June 22 that a foreign specialty reinsurance company owes a defunct company $926,000 in attorney fees for its failure to get court permission before filing an action to arbitrate a contract dispute in Bermuda (In re" MF Global Holdings Ltd., et al. MF Global Holdings Ltd. as plan administrator, and MF Global Assigned Assets LLC v. Allied World Assurance Company Ltd., et al., Chapter 11 No. 11-15059, Adv. Proc. No. 16-01251, S.D. N.Y. Bkcy., 2017 Bankr. LEXIS 1585).

    Mealey's Bankruptcy - 'Insured Vs. Insured' Exclusion Bars Coverage For Trustee's Breach Of Fiduciary Suit

    CINCINNATI - A majority of the Sixth Circuit U.S. Court of Appeals on June 20 held that a management liability insurance policy's "insured-versus-insured" exclusion bars coverage for a liquidation trustee's $18.8 million breach of fiduciary lawsuit against officers of the bankrupt holding company (Indian Harbor Insurance Co. v. Clifford Zucker, et al., Nos. 16-1695, 16-1697 and 16-1698, 2017 U.S. App. LEXIS 10821, 6th Cir).

    Mealey's Bankruptcy - Kaiser Gypsum Gets 3 More Months To File Reorganization Plan

    CHARLOTTE, N.C. - With negotiations ongoing among Chapter 11 debtor Kaiser Gypsum Co. and its various stakeholders, including asbestos personal injury claimants, a North Carolina federal bankruptcy judge on June 14 gave the company three more months to file a plan of reorganization (In re Kaiser Gypsum Company, Inc., et al., No. 16-31602, W.D. N.C. Bkcy.).

    Mealey's Bankruptcy - Federal Judge Confirms Garlock Sealing's Joint Plan Establishing Asbestos Trust

    CHARLOTTE, N.C. - A North Carolina federal judge on June 12 confirmed the plan of reorganization for Chapter 11 debtor Garlock Sealing Technologies LLC after an insurer's remaining objections to the plan were resolved at a one-day bankruptcy court confirmation hearing in May (In re: Garlock Sealing Technologies, LLC, et al., No. 3:17-cv-275, W.D. N.C.).

    Mealey's Bankruptcy - John Crane Details RICO, Fraud Allegations Against Shein Firm

    PHILADELPHIA - Four asbestos disease sufferers won multimillion verdicts against solvent manufacturers, then went out and made claims against asbestos trusts of bankrupt manufacturers whose products they had denied any exposure to when questioned in their court cases in a racketeering scheme devised by their attorneys, John Crane Inc. (JCI) alleges in a May 31 statement in Pennsylvania federal court (John Crane Inc. v. Shein Law Center Ltd., et al., No. 2:17-cv-02210, E.D. Pa.).

    Mealey's Bankruptcy - John Crane Takes RICO Claims Against Lawyers To Pennsylvania Federal Court

    PHILADELPHIA - Less than two months after having its fraud and racketeering claims against two law firms and their founders dismissed for lack of personal jurisdiction, John Crane Inc. (JCI) filed the identical claims against one of the firms and its principals in Pennsylvania federal court May 15 (John Crane Inc. v. Shein Law Center Ltd., et al., No. 2:17-cv-02210, E.D. Pa.).

    Mealey's Bankruptcy - Rapid-American, Insurer Both Denied Judgment On Policy's Limits

    NEW YORK - A New York federal bankruptcy judge on May 15 declined to award summary judgment to either Chapter 11 debtor Rapid-American Corp. or one of its insurers in a dispute over whether a policy has a $7 million or $14 million limit for asbestos liability claims, saying the policy is too ambiguous to interpret at this stage (Rapid-American Corporation, et al. v. Travelers Casualty and Surety Company, et al., No. 15-01095, S.D. N.Y. Bkcy.).

    Mealey's Bankruptcy - Panel: Asbestos Trust Owes Law Firm For Work On Claim To Insolvent Insurer

    ST. PAUL, Minn. - A trial court erred by releasing an asbestos settlement trust of any duty to pay a law firm for work on a claim filed with an insolvent insurer despite finding that the firm performed some uncompensated work on that claim for which a promise to pay was implied, a Minnesota panel held May 8 (Faricy Law Firm, P.A., v. API Inc., Asbestos Settlement Trust, No. A16-1539, Minn. App., 2017 Minn. App. Unpub. LEXIS 421).

    Mealey's Bankruptcy - Battle Over Superfund Site Cleanup Not A Bankruptcy Issue, Judge Says In Remanding

    NEWARK, N.J. - A dispute among several companies, including former Chapter 11 debtor G-I Holdings Inc., over who should pay for the cleanup of a 26-acre polluted industrial site in New Jersey does not belong in federal bankruptcy court, a federal judge ruled May 5 in agreeing to remand the case to state court (G-I Holdings Inc., et al. v. Ashland Inc., et al., No. 17-0077, D. N.J.).

    Mealey's Bankruptcy - Disability Claimant Is Not Precluded From Pursuing Claim, Magistrate Judge Says

    ST. LOUIS - A disability claimant is not barred from pursuing a claim for long-term disability (LTD) benefits because the claimant was not required to disclose the disability benefits claim as part of her assets in a bankruptcy case as the disability claim did not begin to accrue until after the bankruptcy case was filed, a Missouri federal magistrate judge said May 2 (Rochelle Byrd v. Wellpoint Flexible Benefit Plan, et al., No. 17-8, E.D. Mo., 2017 U.S. Dist. LEXIS 66460.

    Mealey's Bankruptcy - Lack Of Jurisdiction Dooms Bid To Enforce Injunction For Environmental Claims

    NEWARK, N.J. - A New Jersey federal bankruptcy judge on May 1 declined to decide a request by former Chapter 11 debtor G-I Holdings Inc. to enforce its reorganization plan injunction to bar indemnification claims for cleanup of a polluted industrial site, saying G-I's appeal of a remand order in the dispute deprives her of jurisdiction (In re: G-I Holdings, Inc., et al., Nos. 01-30135 and 01-38790, D. N.J. Bkcy., 2017 Bankr. LEXIS 1194).