Supremes to Hear Case on Viability of Johns-Manville Channeling Injunction

Supremes to Hear Case on Viability of Johns-Manville Channeling Injunction

Hat Tip to M. Jonathan Hayes at Bankruptcy Prof Blog for posting this “heads up” on Supreme Court arguments to be heard in 2009 on two related bankruptcy cases.  For a more complete write-up, follow the link from Jonathan’s blog – or link from here to see the discussion on Akin Gump’s SCOTUSBlog.  The petition for certiorari and accompanying briefs are available after the jump here.

Supreme Court Accepts New Bankruptcy case

It’s actually a pair of cases: Travelers Indemnity Co. v. Bailey and Common Law Settlement Counsel v. Bailey. The cases arise out of the Johns-Manville asbestos cases. The issue is whether new lawsuits being filed by claimants directly against insurers are barred by the Plan of Reorganization and a subsequent settlement between the insurers and claimants. Some claimants did not agree to the settlement but the bankruptcy court and a federal District Court made clear that the lawsuit ban in the 1986 reorganization plan did apply to such lawsuits – present and future – against Travelers. Those rulings were reversed by the circuit court of appeals saying that the bankruptcy court did not have jurisdiction in 1986 to stop the lawsuits directly against the insurers.

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