Supreme Court Sympathizes With Insurer in Bankruptcy Proceeding

An insurance company claims federal law gives it the right to participate in a bankruptcy proceeding that could lead to massive liabilities.

A sign warns of asbestos danger at a former Royal Mail sorting office in London on Oct. 11, 2013. Peter Macdiarmid/Getty Images

U.S. Supreme Court justices seemed receptive this week to an insurer’s claim that it should have a voice in a bankruptcy reorganization plan that it claims will leave it open to paying fraudulent asbestos exposure claims.

The oral argument in Truck Insurance Exchange v. Kaiser Gypsum Co. Inc. on March 19 focused on whether or not Truck Insurance has standing in Kaiser Gypsum’s bankruptcy reorganization plan considering that it will be liable for claims against the company.