Supreme Court Denies Priority Status For Workers’ Compensation Premiums

Law360, New York (September 11, 2006, 12:00 AM EDT) -- In a recent decision, the U.S. Supreme Court clarified an important issue to workers’ compensation insurers holding that pre-petition unpaid workers’ compensation premiums are not entitled to priority status under the Bankruptcy Code. Howard Delivery Service, Inc., et. al v. Zurich American Ins. Co., 126 S.Ct. 2105 (2006).

This decision forecloses any disagreement among the circuit courts that unpaid workers’ compensation premiums are entitled to priority status in a bankruptcy proceeding. In light of Howard, such claims are now considered merely general unsecured claims. Had the...
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