Supreme Court Expands Insurers' Rights by Holding That Insurers Are "Parties in Interest" in Bankruptcy Proceedings

In an article for the New York Law Journal titled, “Supreme Court Expands Insurers' Rights by Holding That Insurers Are 'Parties in Interest' in Bankruptcy Proceedings,” Schulte Roth & Zabel of counsel Howard Epstein, partner Ted Keyes and associate Julia Cummings analyze the US Supreme Court’s notable ruling in Truck Insurance Exchange v. Kaiser Gypsum Company. 

 

The Supreme Court wrapped up its 2023-24 term in June 2024, handing down a number of long-awaited rulings. In the insurance space, no decision was more highly-anticipated than that issued in Truck Insurance Exchange v. Kaiser Gypsum Company. In Truck Insurance Exchange, the issue presented was whether an insurer with financial responsibility for a bankruptcy claim is considered a "party in interest" under Section 1109(b) of the Bankruptcy Code. In its June 6, 2024 opinion, the court held that such an insurer is a "party in interest," opening the door for Truck Insurance Exchange and similarly-situated insurers to "'raise and [to] appear and be heard on any issue' in a Chapter 11 case." Truck Ins. Exch. v Kaiser Gypsum Co., 144 S. Ct. 1414, 1418 (2024).