9th Circ. Rejects Insurer's Contract Claims Against Thorpe

Law360, New York (January 30, 2012, 6:00 PM EST) -- The Ninth Circuit on Monday refused to force arbitration in a dispute over whether Thorpe Insulation Co.'s Chapter 11 reorganization plan, which established a $600 million trust for asbestos claims, breached a settlement agreement the company had previously reached with Continental Insurance Co.

Deciding an issue of first impression for the circuit, a three-judge panel ruled that only bankruptcy courts have the authority to determine whether a company breached a contract while setting up a trust for asbestos claims under Section 524(g) of the Bankruptcy Code....
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