The U.S. Supreme Court has issued a ruling that allows insurers to object to Chapter 11 reorganization plans that could directly and adversely affect them financially. In the case of Truck Insurance Exchange v. Kaiser Gypsum, Justice Sonia Sotomayor, writing for a unanimous court, held that insurers are considered a “party in interest” under Section 1109(b) of the Bankruptcy Code. This decision affords insurers the right to challenge reorganization plans when they are on the hook for significant claims, such as those stemming from asbestos liabilities.
Justice Sotomayor’s opinion underscores the importance of allowing insurers to protect their financial interests during the bankruptcy process. You can read the full opinion from the Supreme Court here. For further details, the original article is available on the National Law Journal.