U.S. Supreme Court Grants Certiorari in Landmark Asbestos Bankruptcy Case
Today the United States Supreme Court granted the petition for certiorari filed by the Firm on behalf of Travelers Indemnity Company, agreeing to review a federal appellate court's decision in the Johns-Manville bankruptcy. The lower court permitted a broad collateral challenge to the subject matter jurisdiction of the nation's bankruptcy courts, thereby threatening the finality and repose properly provided by federal court judgments. The Supreme Court's decision to hear the case may result in one of the most important bankruptcy rulings in years.
The Firm has represented Travelers in the Johns-Manville matter since the early 1980s, when Manville became the first Fortune 500 company to file for bankruptcy as a result of asbestos-related liabilities. In 1986, the U.S. Bankruptcy Court for the Southern District of New York confirmed Johns-Manville’s reorganization plan and entered orders shielding the company’s insurers, including Travelers, against claims arising out of or related to Manville. On application of the Firm in 2002, the bankruptcy court enforced this injunctive relief by halting numerous actions filed by asbestos claimants around the country, including several class actions, on the grounds that the litigants’ claims against Travelers were founded on knowledge Travelers obtained from its insurance relationship with Johns-Manville and were therefore barred by the Court's prior orders. The bankruptcy court's enforcement order was affirmed by the district court, but vacated by the Second Circuit in February 2008. The Supreme Court will now review the Second Circuit's ruling.
The Simpson Thacher team consisted of Barry Ostrager, Mike Sigal, Andy Frankel, Rob Pfister, Gabe Miller and Nick Melzer. Oral argument will be heard either on March 30, 31, or April 1, with a decision expected by the end of the current Term.