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Insurance Bankruptcy, Insolvency, and Restructurings

Overview

Policyholder bankruptcies significantly impact insurers. Bankruptcy often threatens the interests of insurers, but at the same time it can provide insurers with opportunities, such as the chance to bolster policy buy-backs and releases with injunctions and other protections not available outside bankruptcy. Where an insurer is defending or indemnifying the policyholder, bankruptcy can change what an insurer may pay and how it may interact with its policyholder. Where an insurer is engaged in a coverage dispute with a policyholder, bankruptcy may affect the venue of litigation, the procedure applied, and the substantive relief available. Bankruptcy frequently imposes additional requirements and tight deadlines that are not familiar to many insurers. Knowledgeable advice and counsel are a must. 

Our bankruptcy team has focused on insurer-centric work for several decades, taking leading roles for insurers in many of the most complex asbestos and mass tort bankruptcy proceedings. We also have extensive experience representing insurers in receiverships and with respect to issues involving dissolved corporations. We counsel insurer clients about bankruptcy and insolvency issues, litigate in the bankruptcy court (including serving as lead trial counsel in multi-week confirmation hearings), argue appeals, and seek negotiated resolutions where appropriate. 

Examples of our bankruptcy, receivership, and other insolvency related work include representing insurers in the following types of matters: 

  • Asbestos-related bankruptcies, including current cases such as Kaiser Gypsum, Imerys, Duro Dyne, and Fraser’s Boiler Service and past cases such as Combustion Engineering, W.R. Grace, Federal-Mogul, Halliburton, Thorpe Insulation, Plant Insulation, Quigley, and Flintkote. Click here for charts listing all asbestos bankruptcies ever filed and selected Crowell publications concerning asbestos bankruptcies.
  • Bankruptcies of Roman Catholic archdioceses and dioceses defending thousands of sexual abuse claims.
  • Bankruptcy cases involving underlying liabilities arising from environmental claims, silica, defective polybutylene plumbing, defective home heating furnaces, Chinese drywall, and a bridge collapse.
  • Appeals from bankruptcy court rulings in district courts and in circuit courts throughout the country, including in the landmark Combustion Engineering bankruptcy case (see In re Combustion Engineering, Inc., 391 F.3d 190 (3d Cir. 2004)), in In re United States Brass Corp., 110 F.3d 1261 (7th Cir. 1997), and In re JT Thorpe Co., where we obtained from the Fifth Circuit a stay pending appeal of a confirmation order in a "pre-packaged" asbestos bankruptcy.
  • The state court receivership of a company that is attempting to use an assignment for benefit of creditors (instead of a bankruptcy) to address its asbestos liabilities.
  • Counseling insurers about potential bankruptcy options their policyholders might pursue in connection with an enterprise-threatening series of tort claims.
  • Advising insurers contemplating settlements with policyholders who are thought to be bankruptcy risks regarding how best to negotiate and structure the settlement to eliminate future preference, fraudulent conveyance, and other risks to the insurers.
  • Advising insurers about how the bankruptcy of a company that claims to share insurance with a non-bankrupt policyholder may impact the insurer’s ability to defend or indemnify the non-bankrupt policyholder, and assisting insurers in addressing the issues that arise in such circumstances.
  • Advising insurers on issues concerning actual or potential corporate dissolutions of policyholders with asbestos or other enterprise-threatening liabilities.

While we are nationally-recognized coverage attorneys who regularly handle both the coverage and bankruptcy aspects of a particular matter for our insurer clients, we also frequently work collaboratively with an insurer’s existing coverage counsel to ensure that the insurer obtains the best possible representation on all issues affected by a prospective or filed bankruptcy case.

Insights

Firm News | 4 min read | 01.02.15

Crowell & Moring Elects Six New Partners and Promotes Eight Associates to Counsel

Washington, D.C. – January 2, 2015: Crowell & Moring LLP is pleased to announce that it has elected six attorneys to the firm's partnership effective January 1, 2015. The firm has also promoted eight associates to the position of counsel. The new partners and counsel have been promoted from within the ranks of the firm's Washington, D.C., Brussels, New York, Orange County, and San Francisco offices. ...

Representative Matters

  • We serve as counsel to insurers in many of the nation's leading asbestos-related bankruptcies, including W.R. Grace, Federal-Mogul, Combustion Engineering, Thorpe Insulation, Quigley, Plant Insulation, JT Thorpe, Flintkote, ASARCO, Burns & Roe, Porter Hayden, Lloyd E. Mitchell, and Skinner.
  • We served as lead trial and appellate counsel for several insurers in the landmark Combustion Engineering case (see In re Combustion Eng'g, Inc., 391 F.3d 190 (3d Cir. 2004)).
  • We were obtained a stay pending appeal of a confirmation order in a "pre-packaged" asbestos bankruptcy (see, In re JT Thorpe Co., Nos. 03-20112 and 03-20135 (5th Cir. 2003)).
  • We are currently counseling a consortium of leading American insurance companies concerning issues relating to bankruptcies arising out of mass tort claims, and recently counseled a major manufacturing company concerning the potential impact if its former parent, an asbestos defendant, filed bankruptcy.
  • We served as lead counsel for the debtor's insurance carriers in In re US Brass Corp., a Chapter 11 case involving thousands of products liability claims by persons allegedly damaged by failures of the debtor's polybutylene plumbing products.
  • We represent insurers in the mass tort bankruptcy of a former manufacturer of allegedly defective home heating furnaces.

Insights

Firm News | 4 min read | 01.02.15

Crowell & Moring Elects Six New Partners and Promotes Eight Associates to Counsel

Washington, D.C. – January 2, 2015: Crowell & Moring LLP is pleased to announce that it has elected six attorneys to the firm's partnership effective January 1, 2015. The firm has also promoted eight associates to the position of counsel. The new partners and counsel have been promoted from within the ranks of the firm's Washington, D.C., Brussels, New York, Orange County, and San Francisco offices. ...

Insights

Firm News | 4 min read | 01.02.15

Crowell & Moring Elects Six New Partners and Promotes Eight Associates to Counsel

Washington, D.C. – January 2, 2015: Crowell & Moring LLP is pleased to announce that it has elected six attorneys to the firm's partnership effective January 1, 2015. The firm has also promoted eight associates to the position of counsel. The new partners and counsel have been promoted from within the ranks of the firm's Washington, D.C., Brussels, New York, Orange County, and San Francisco offices. ...