Bankruptcy Litigation

From Good Hands to (Bankruptcy) Boxing Gloves: the Impact of Truck Insurance Exchange v. Kaiser Gypsum Company on Your Next Reorganization

The Supreme Court's June 2024 decision in Truck Insurance Exchange v. Kaiser Gypsum Company held that insurers qualified as "parties in interest" under Section 1109(b), entitling those insurers to object to a plan of reorganization. This landmark decision is likely to have far-ranging effects in the reorganization world and affect debtors and creditors committees alike. The ABI should host a panel examining the expected extent and impact of those effects, including that:
- debtors and creditors should prepare for the fact that insurance carriers will start getting a seat at the negotiating table;
- the insurance industry may view Truck as not merely granting a seat at the table, but also as an invitation to test the boundaries of its newly granted position;
- Truck presents an existential threat to the already-risky tack of chapter 11 plans' limiting director and officer liability to only insurance proceeds;
- insurance carriers will likely leverage Truck to urge courts in jurisdictions that deem insurance proceeds to be property of the estate to reexamine the status quo; and
- insurance carriers will begin to horse-trade for concessions in connection with first-day motions and debtors' purchasing tail coverage and run-off policies post-petition. Participants will gain knowledge and skills vital to negotiating insurance-related issues in bankruptcy, such as:
- traps for the unwary in attempting to limit liability in chapter 11 plans to only insurance proceeds;
- how to maximize or minimize Truck's reach in their next plan negotiation, depending on whether their goal is to tout or downplay its effects; and
- how to navigate coverage issues if insurance carriers are granted a seat at the table during their next plan negotiation. Debtor Suggested Speakers Brandon Lewis blewis@reidcollins.com Reid Collins & Tsai LLP

The Role of Investigations in a Bankruptcy

Nardello & Co. is the only Band 1 ranked investigations firm in the United States, whose experts have worked on some of the highest profile and most complex bankruptcy cases of the past decade. This includes recovering assets on behalf of investors following the collapse of FTX and assisting Sandy Hook families as creditors in the bankruptcy of InfoWars creator Alex Jones. The purpose of the session would be to discuss how investigative firms can serve a unique role bankruptcies and insolvencies. Specific topic areas would be uncovering fraud and malfeasance that have collapsed companies, tracing and recovering assets, digital investigations and cryptocurrency tracing, supporting litigation to clawback funds and performing due diligence on bidders of debtor assets to make sure that they have the necessarily wherewithal and don’t present compliance issues. The panelists will share novel and practical perspectives on how to approach these issues, drawing on Nardello & Co.’s investigative expertise in recent insolvency matters and global presence. Participants will learn when and how to utilize investigative firms to assist their clients, whether they are corporate debtors or creditors committees. Nardello & Co. would bring in Lawyers who worked on these cases or similar, to speak on panel, if desired. Business Suggested Speakers Meredith Allesee mallesee@nardelloandco.com Nardello & Co.

A Chapter 7 Case Raises Issues in Truck Insurance on Standing in Bankruptcy Cases

Judge Mastando in New York decided that a chapter 7 trustee has authority to put the debtor’s subsidiary voluntarily into bankruptcy.