A Settling Party's Cross-Claim Shield In Bankruptcy Cases

Law360, New York (April 7, 2014, 1:01 PM EDT) -- California Code of Civil Procedure Sections 877.6 and 877 create a procedure whereby a settling defendant can be insulated from claims of contribution and indemnity from nonsettling co-defendants. This arises in cases of joint tortfeasors, environmental or asbestos situations where one defendant wants to extricate itself and eliminate the risk of future cross-claims for contribution or indemnity from the other defendants.

In bankruptcy cases, multiple defendants are frequently jointly sued in avoidance actions pursuant to 547 or 548. Co-defendants may have contribution or other cross-claims against...
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