For decades, insurers seeking to object in their insured's Chapter 11 reorganizations were blocked by the "insurance neutrality" doctrine, a prudential limitation that stopped courts from considering objections on the merits unless the insurer could show a confirmed plan "impair[ed] the insurer's pre-petition policy rights" or "'alter[ed] the quantum of liability'" it faced.
Supreme Court Puts End to Prudential Barriers In Chapter 11 Appeals
The Supreme Court's holding ensures that insurers who have long been silenced in Chapter 11 proceedings will now be heard. It is also a shot across the bow for two other judge-made, atextual doctrines that bar consideration of the merits in Chapter 11 appeals.
By
David Casazza, Elizabeth Kiernan and Addison Bennett
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