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Non-Debtor Insurance in Asbestos Bankruptcies: What Is the Future?
In the few short years since Fuller-Austin was decided, the use of “prepack” bankruptcies has become a favored approach to resolving asbestos liabilities, often with the threat of a “Fuller-Austin result” as a hammer over the insurers asked to pick up the tab. Here's the drill: A policyholder uses section 524(g) of the Bankruptcy Code to channel its present and future asbestos liabilities to a trust; under policyholder's reorganization plan, the trust is funded in significant part with insurance rights; the insurers cannot object to the plan because it is said not to affect their interests; yet plan confirmation triggers coverage for the entire liability in an amount (often a nine or 10 digit amount) to be determined at a later date. See Fuller-Austin Insulation Co., 2002 WL 31005090 (Cal. Sup. Ct. Aug. 6, 2002) (appeal pending). The pressure this Fuller-Austin play puts on insurers leads many to settle their coverage obligations ' often a rational response to a high-stakes game in which insurers have few sources of leverage.
Seeking to expand both the scope of the 524(g) injunction and the pot of available insurance assets, proponents of some asbestos prepacks have moved to “bolt-on” to pending asbestos bankruptcies various non-debtor liabilities, accompanied by assignments of non-debtor policy rights to pay for them. Such “bolt-ons” were proposed in the Federal Mogul and Combustion Engineering prepacks. A somewhat similar approach emerged in the non-prepack Pittsburgh-Corning bankruptcy. Pittsburgh-Corning differs from the bolt-on prepacks in several important respects, including the broad consensual involvement of many insurers and a significant shared insurance program among the debtor and the non-debtors.
The bolt-on approach has obvious appeal to the non-debtors, who buy peace from asbestos liability without entering bankruptcy. Claimants' representatives, subject to due process requirements, get to sell that peace efficiently to multiple buyers in a single bankruptcy proceeding. It was apparently assumed that insurers would be required to accept the assignment of non-debtor policy rights made to fund the bolted-on liabilities, as has generally been the case with the debtor's assignment of policy rights.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Anti-Assignment Override Provisions
UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?