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Unreimbursed Medical Expenses of Retirees Entitled to Priority Status in Bankruptcy Proceeding According to Latest ABI Poll

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Contact: John Hartgen

            

703-739-0800

            

jhartgen@abiworld.org

 

UNREIMBURSED
MEDICAL EXPENSES OF RETIREES ENTITLED TO PRIORITY STATUS IN BANKRUPTCY
PROCEEDING, ACCORDING TO LATEST
w:st='on'>ABI POLL

August 21, 2007, Alexandria,

Va. —A majority of respondents (52 percent) to
ABI’s latest online
poll agreed that unreimbursed medical expenses incurred by retirees of a

bankrupt firm are entitled to priority status under the Bankruptcy Code.

Forty-two percent of respondents “strongly agreed” and 10
percent “somewhat agreed” that unreimbursed medical expenses

incurred by retirees are entitled to priority status in a bankrupt
firm’s proceeding under §507(a)(5), subject to the temporal
and dollar limitations set forth in the section.

Twenty-nine percent of
respondents, however, did not agree that medical expenses of retirees
should receive a priority status under §507(a)(5).  Twenty
percent “strongly disagreed” and 9 percent “somewhat
disagreed” that unreimbursed medical expenses incurred by retirees

of a bankrupt firm are entitled to a priority status under
§507(a)(5), subject to the temporal and dollar limitations set
forth in the section. Seventeen percent of the respondents did not know
or had no opinion on the issue.

The U.S. Bankruptcy Court for
the Southern District of California recently ruled in In re
Consolidated Freightways Corp. of Delaware (Bankr. C.D. Cal. No
RS02-24284 4/26/07) that retiree medical expenses are entitled to
priority status under §507(a)(5), subject to the temporal and
dollar limitations set forth in the section. The court noted that the
legislative history and the public policy behind §507(a)(5)
compelled it to include retired employees within the cap amount for a
priority status claim. 


size='3'>ABI members and members of the public
were welcome to submit their response to the statement: “

face='Times New Roman' color='black'>Subject to the temporal and dollar
limitations set forth in §507(a)(5), unreimbursed medical expenses
incurred by retirees of a bankrupt firm are entitled to priority status
under §507(a)(5). (In re
Consolidated Freightways Corp. of
w:st='on'>Delaware, (Bankr. C.D. Cal. No.
RS02-24284 MG 4/26/07
color='black'>). The latest
w:st='on'>ABI Quick Poll was open to the public for
voting from August 3-16.


size='3'>ABI’s weekly Quick Poll is posted

on ABI’s home page,
title='http://www.abiworld.org/' href='http://www.abiworld.org/'>
color='#0000ff'>www.abiworld.org.
w:st='on'>ABI members and the public are invited to
respond to a question on a timely bankruptcy or insolvency issue. Visit

href='http://www.abiworld.net/quickpoll/'>
color='#0000ff'>http://www.abiworld.net/quickpoll/ to access
the results of previous ABI
Quick Polls.

###


size='3'>ABI is the largest multi-disciplinary,
nonpartisan organization dedicated to research and education on matters
related to insolvency. ABI
was founded in 1982 to provide Congress and the public with unbiased
analysis of bankruptcy issues. The
w:st='on'>ABI membership includes nearly 11,500
attorneys, accountants, bankers, judges, professors, lenders, turnaround

specialists and other bankruptcy professionals, providing a forum for
the exchange of ideas and information. For additional information on
ABI, visit www.abiworld.org.
For additional conference information, visit
title='http://www.abiworld.org/conferences.html'
href='http://www.abiworld.org/conferences.html'>
color='#0000ff'>http://www.abiworld.org/conferences.html.