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High Court Mulls Ch. 11 Judges’ Power To Bar Suits

Law360, New York (March 30, 2009, 12:00 AM EDT) -- U.S. Supreme Court justices expressed two key concerns during oral arguments Monday in a case over whether asbestos claimants can sue insurer Travelers Indemnity Co. and affiliates, despite an order prohibiting such suits in the bankruptcy of policyholder Johns-Manville Corp.

Namely, the justices questioned whether bankruptcy judges were allowed to go too far in imposing decisions on nondebtor parties, and also whether more narrowly construing those powers could harm bankrupt companies’ reorganizing efforts.

In a case closely watched by followers of mass tort, insurance and bankruptcy...
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