Workers' compensation carriers and self-insured employers with subrogation exposure tied to Asbestos Corporation Limited chrysotile fiber have six days left to act. On September 3, 2026, Judge Lisa G. Beckerman of the United States Bankruptcy Court for the Southern District of New York recognized and enforced the Superior Court of Quebec's Asbestos Claims Bar Date Order in ACL's Chapter 15 case. The September 10, 2026, deadline discussed in my August 20 post, Asbestos Claims Clock Runs Out, is now judicially enforceable in the United States. This update walks through what changed, what the court flagged as unresolved, and what it means specifically for workers' compensation claims, liens, and third-party recovery rights.
Two Orders That Matter To Workers’ Compensation Practitioners
This case has moved in two stages that compensation practitioners should track together. First, on October 29, 2025, Judge Martin Glenn recognized ACL's Canadian CCAA proceeding as a foreign main proceeding under section 1517(a) and, importantly, extended the automatic stay of section 362 to three non-debtor parties: Certain London Market Insurers, claims administrator Resolute, and successor entity General Dynamics. That stay extension matters because it froze pending and future litigation, including subrogation and contribution claims, against those parties, not only against ACL itself. Second, the September 3, 2026 decision recognized and enforced the bar date orders that set the claims-filing deadline. Together, the two rulings mean that any workers’ compensation carrier, self-insured employer, or third-party lienholder with a claim touching ACL, CLMI, Resolute, or General Dynamics is now operating inside the Canadian CCAA claims process, not ordinary state court litigation.
The Court's Reasoning
Under section 1521(a)(7) of the Bankruptcy Code and the comity principles of section 1507(b), the court found creditor interests sufficiently protected within the meaning of section 1522(a), applying the three-part sufficient-protection standard the court has long used, most notably in In re Metcalfe & Mansfield Alternative Investments, 421 B.R. 685, 698 (Bankr. S.D.N.Y. 2010): just treatment of all claimants, protection against prejudice and inconvenience in the foreign process, and distribution substantially in accordance with the order U.S. law would prescribe. The court rejected the argument that bar dates are categorically disfavored in asbestos cases. Section 524(g) trusts make bar dates unusual, though not unheard of, in United States Chapter 11 asbestos filings, but Canada has no equivalent statute, and the CCAA process gave the Asbestos Parties, the Chapter 7 trustee for National Services Industries and a group of individual claimants, a full opportunity to be heard by Justice Émond of the Quebec Superior Court before the bar date order issued. The court also rejected the public policy objection under section 1506, describing that standard as narrow.
Gaps The Court Flagged, And Why Workers’ Compensation Claims Are Exposed
Judge Beckerman granted the motion but flagged four gaps that directly affect how workers’ compensation carriers and lienholders should file. On choice of law, it is not clear that claimants, including subrogated carriers, have been told their claims will be adjudicated under Quebec and Canadian law rather than the workers' compensation or tort law of the claimant's home state, a significant shift for anyone used to state workers’ compensation precedent controlling valuation. On the cure period, the Monitor's thirty-day window for curing a deficient proof of claim struck the court as too short given that mail from Canada can take more than a week to arrive, and the court recommended sixty days instead, meaning a claim that looks complete when filed can still be lost to a mail delay if it is flagged deficient. On claims officers, the order says nothing about who will hear appeals, even though the Monitor testified they will be former Canadian judges vetted by the Canadian Court, an unfamiliar appellate track for U.S. workers’ compensation counsel. And on sequencing, the court suggested the Monitor hold off on substantive determinations of U.S. claims until the valuation matrix and claims protocol are finalized and the separate Claims Adjudication Orders are recognized, which remains pending before this court.
What This Means For Workers' Compensation Claims
The practical impact on workers’ compensation claims runs in four directions. First, subrogation and lien rights are not self-executing in the CCAA process. A carrier or self-insured employer that paid workers' compensation benefits on a claim later tied to ACL asbestos exposure must file its own proof of claim to preserve statutory lien and reimbursement rights, such as those under N.J.S.A. 34:15-40 or comparable state statutes, by the September 10, 2026 deadline. Simply having paid benefits, or having an existing lien noted in a state workers’ compensation file, will not protect the recovery automatically. Second, the stay extended to CLMI, Resolute, and General Dynamics means any pending third-party or contribution action naming those parties is currently frozen and must be redirected into the Canadian claims process rather than pursued in state court. Third, the bar date reaches claimants diagnosed as of the Monitor's Claims Bar Date Certificate date, so any workers’ compensation file with a diagnosed occupational disease claim tied to ACL exposure needs review now, while claims involving exposed but not-yet-diagnosed workers or dependents remain outside the bar date as future asbestos claims. Fourth, because claims officers under the Canadian process are expected to be former Canadian judges applying Quebec and Canadian law, valuations may not track the causation and apportionment rules workers’ compensation practitioners rely on under state law, which is exactly the concern Judge Beckerman flagged and asked the Monitor to clarify.
Action Items Before September 10, 2026
1. Audit open and closed workers’ compensation files for any diagnosed occupational disease claim tied to ACL chrysotile fiber exposure, including claims where the employer or its insurer already paid benefits.2. File a protective proof of claim with the Monitor for every identified exposure, even where documentation is incomplete, since incomplete filings can still preserve the claim through the cure process.3. Preserve statutory lien and subrogation rights as a separate line item on the proof of claim form; do not assume the CCAA process protects them automatically.4. Pause any pending third-party or contribution litigation against ACL, CLMI, Resolute, or General Dynamics that may be caught by the extended automatic stay, and confirm status with Chapter 15 counsel.5. Submit complete filings rather than relying on the cure period, given the court's finding that the current thirty-day cure window may not survive mail transit time from Canada.6. Monitor the Kroll claims portal and the docket for this court's ruling on the still-unrecognized Claims Adjudication Orders, which will set how filed claims are actually valued and paid.
The Bigger Picture
This case is one of the first U.S. rulings to test how a CCAA bar date and claims adjudication process, built without anything resembling section 524(g), measures up against Chapter 15's comity and due process framework for mass tort claimants, and it is doing so in a way that reaches directly into workers' compensation subrogation and lien practice. Judge Beckerman's answer, recognition paired with a detailed list of conditions rather than an unconditional stamp of approval, may become the template for the next Canadian insolvency proceeding that touches American occupational disease claims.
Sources
1. In re Asbestos Corporation Limited, No. 25-10934 (LGB) (Bankr. S.D.N.Y.), Decision Regarding Foreign Representative's Motion for Order Recognizing and Enforcing the Bar Date Orders and Claims Adjudication Orders, ECF No. 220 (Sept. 3, 2026).
2. In re Asbestos Corporation Ltd., No. 25-10934 (MG) (Bankr. S.D.N.Y.), Memorandum Opinion Granting Recognition of Foreign Main Proceeding and Extending the Automatic Stay, ECF No. 141 (Oct. 29, 2025), nysb.uscourts.gov.
3. In re Metcalfe & Mansfield Alternative Investments, 421 B.R. 685, 698 (Bankr. S.D.N.Y. 2010), CourtListener.
4. Morning Mist Holdings Ltd. v. Krys (In re Fairfield Sentry Ltd.), 714 F.3d 127 (2d Cir. 2013), CourtListener.
5. Queenie, Ltd. v. Nygard International, 321 F.3d 282 (2d Cir. 2003), CourtListener.
6. MacArthur Co. v. Johns-Manville Corp., 837 F.2d 89 (2d Cir. 1988), CourtListener.
7. 11 U.S.C. §§ 105(a), 1501, 1506, 1507, 1517, 1519, 1521, 1522 (Chapter 15, Bankruptcy Code).
8. N.J.S.A. 34:15-40 (workers' compensation lien and third-party subrogation rights).
9. Kroll Restructuring Administration LLC, Asbestos Corporation Limited claims portal, cases.ra.kroll.com/asbestoscorporation.
10. Jon L. Gelman, Asbestos Claims Clock Runs Out, Workers' Compensation, workers-compensation.blogspot.com (Aug. 20, 2026), workers-compensation.blogspot.com.
Recommended Citation
Gelman, Jon L., Workers’ Compensation Liens Race the Clock, Workers' Compensation, workers-compensation.blogspot.com (Sept. 4, 2026),
About The Author
Jon L. Gelman of Wayne, NJ, is the author of NJ Workers' Compensation Law (West-Thomson-Reuters) and co-author of the national treatise Modern Workers' Compensation Law (West-Thomson-Reuters).
Blog: Workers' Compensation
LinkedIn: JonGelman
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© 2026 Jon L Gelman. All rights reserved.
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