Bankruptcy, Insolvency, and Restructurings


Policyholder bankruptcies significantly impact insurers. Bankruptcy often threatens the interests of insurers, but at the same time it can provide insurers with opportunities, such as the chance to bolster policy buy-backs and releases with injunctions and other protections not available outside bankruptcy. Where an insurer is defending or indemnifying the policyholder, bankruptcy can change what an insurer may pay and how it may interact with its policyholder. Where an insurer is engaged in a coverage dispute with a policyholder, bankruptcy may affect the venue of litigation, the procedure applied, and the substantive relief available. Bankruptcy frequently imposes additional requirements and tight deadlines that are not familiar to many insurers. Knowledgeable advice and counsel are a must. 

Our bankruptcy team has focused on insurer-centric work for several decades, taking leading roles for insurers in many of the most complex asbestos and mass tort bankruptcy proceedings. We also have extensive experience representing insurers in receiverships and with respect to issues involving dissolved corporations. We counsel insurer clients about bankruptcy and insolvency issues, litigate in the bankruptcy court (including serving as lead trial counsel in multi-week confirmation hearings), argue appeals, and seek negotiated resolutions where appropriate. 

History of Asbestos Bankruptcies

Examples of our bankruptcy, receivership, and other insolvency related work include representing insurers in the following types of matters: 

  • Asbestos-related bankruptcies, including current cases such as Kaiser Gypsum, Imerys, Duro Dyne, and Fraser’s Boiler Service and past cases such as Combustion Engineering, W.R. Grace, Federal-Mogul, Halliburton, Thorpe Insulation, Plant Insulation, Quigley, and Flintkote
  • Bankruptcies of Roman Catholic archdioceses and dioceses defending thousands of sexual abuse claims.
  • Bankruptcy cases involving underlying liabilities arising from environmental claims, silica, defective polybutylene plumbing, defective home heating furnaces, Chinese drywall, and a bridge collapse.
  • Appeals from bankruptcy court rulings in district courts and in circuit courts throughout the country, including in the landmark Combustion Engineering bankruptcy case (see In re Combustion Engineering, Inc., 391 F.3d 190 (3d Cir. 2004)), in In re United States Brass Corp., 110 F.3d 1261 (7th Cir. 1997), and In re JT Thorpe Co., where we obtained from the Fifth Circuit a stay pending appeal of a confirmation order in a "pre-packaged" asbestos bankruptcy.
  • The state court receivership of a company that is attempting to use an assignment for benefit of creditors (instead of a bankruptcy) to address its asbestos liabilities.
  • Counseling insurers about potential bankruptcy options their policyholders might pursue in connection with an enterprise-threatening series of tort claims.
  • Advising insurers contemplating settlements with policyholders who are thought to be bankruptcy risks regarding how best to negotiate and structure the settlement to eliminate future preference, fraudulent conveyance, and other risks to the insurers.
  • Advising insurers about how the bankruptcy of a company that claims to share insurance with a non-bankrupt policyholder may impact the insurer’s ability to defend or indemnify the non-bankrupt policyholder, and assisting insurers in addressing the issues that arise in such circumstances.
  • Advising insurers on issues concerning actual or potential corporate dissolutions of policyholders with asbestos or other enterprise-threatening liabilities.

While we are nationally-recognized coverage attorneys who regularly handle both the coverage and bankruptcy aspects of a particular matter for our insurer clients, we also frequently work collaboratively with an insurer’s existing coverage counsel to ensure that the insurer obtains the best possible representation on all issues affected by a prospective or filed bankruptcy case.