Insights

On June 6, 2024, the United States Supreme Court, in Truck Insurance Exchange v. Kaiser Gypsum Co., Inc., No. 22-1079, unanimously held that an insurer with financial responsibility for bankruptcy claims is a “party in interest” in a Chapter 11 bankruptcy. The Court held the “insurance neutrality doctrine” applied by the courts below was too limited to determine insurer standing. While “insurance neutrality” – preserving insurer rights and defenses under insurance contracts – is important, the doctrine overlooks the myriad ways bankruptcy proceedings and reorganization plans can alter and impair insurer interests.