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Insurer-Funded Ch. 11s Not Always Win-Win

Law360 (May 29, 2009, 12:00 AM EDT) -- Insurance benefits are sometimes used in bankruptcy to help fund reorganization plans for companies beset by asbestos and other mass tort claims. But while some attorneys view the option as an all-around win, others say insurers are starting to raise concerns about the practice.

The method of using insurance benefits to fund reorganizations, applied in concert with the creation of liability trusts, has emerged in a number of pending Chapter 11 bankruptcy cases, including those of mining company Asarco LLC, flooring company Congoleum Corp. and diversified...
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