The Purdue Pharma bankruptcy case will significantly impact workers’ compensation cases nationally. The US Supreme Court heard oral argument this week, and the potential consequences are far-reaching.
Showing posts with label bankruptcy. Show all posts
Showing posts with label bankruptcy. Show all posts
Thursday, December 7, 2023
Sunday, February 23, 2014
Detroit Files Financial Restructuring Plan
DETROIT—The city of Detroit submitted its financial restructuring plan to federal court Friday, a move likely to set off a new round of jockeying among creditors asked to take a haircut in the nation’s largest municipal bankruptcy.
The plan seeks to restructure an estimated $18 billion in long-term obligations by paying secured creditors in full, paying pension funds a reduced amount, and giving other unsecured creditors just a fraction—about 20 cents on the dollar—of the outstanding debt the city still owes.
“There is still much work in front of all of us to continue the recovery from a decadeslong downward spiral,” Detroit Emergency Manager Kevyn Orr said in a statement Friday. “We must move swiftly to emerge from bankruptcy so that the financial distress harming the City can end.”
As part of the plan, city officials said they would set aside $1.5 billion over 10 years for capital improvements, blight removal, and equipment and technology upgrades to make the city safer, cleaner and more efficient. Up to $500 million of that will be dedicated to blight removal over the next five years, officials said. Read the full WSJ story here.
Michigan Gov. Rick Snyder, who steered the city into a bankruptcy filing in July, called on many city creditors who have been reluctant to settle to reconsider.
“Let’s use this plan as a call to action for a voluntary settlement as part of the mediation process to resolve the...
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Jon L. Gelman of Wayne NJ is the author NJ Workers’ Compensation Law (West-Thompson) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thompson). For over 4 decades the Law Offices of Jon L Gelman 1.973.696.7900 jon@gelmans.com have been representing injured workers and their families who have suffered occupational accidents and illnesses.
Read more about "Bankruptcy and Workers' Compensation"
Jan 18, 2014
Public entity bankruptcies have placed the stability of workers' compensation and other benefits into a grey area. As the Detroit bankruptcy resolution continues to stumble the consistency necessary for critical benefit delivery ...
Dec 03, 2013
The "nuclear option" for a workers' compensation claim is a public entity bankruptcy and Detroit got the Court's approval to go forward with the legal maneuver. Over the course of the last 3 decades, bankruptcy has become a ...
Jul 19, 2013
The bankruptcy of the city of Detroit reflects not only an economic and social tragedy for America, but it also marks a failure of basic disability and compensation programs for the US workers. It is a sentinel event marking the ...
Aug 13, 2013
The company — Montreal, Maine and Atlantic Railway — filed for Chapter 11 bankruptcy protection in United States and Canadian courts, citing debts to more than 200 creditors after the July disaster in Lac-Mégantic, Quebec.
Saturday, January 18, 2014
Detroit $165 million bankruptcy settlement rejected
JURIST] A judge for the US Bankruptcy Court for the Eastern District of Michigan[official website] on Thursday rejected a proposed $165 million settlement agreement for the now-bankrupt city of Detroit to pay off UBS and Bank of America [corporate websites]. Referring to the agreement as financially imprudent [WSJ report], Judge Steven Rhodes put a halt to what has been the only completed deal in efforts to cut down the city's $18 billion long-term debt obligation. However, the court did approve of the city borrowing $120 million [Detroit Free Press report] for blight removal as well as improvements to city services. Currently, the city pays UBS and Bank of America $50 million each year, 5 percent of Detroit's annual budget, to reduce its debt.
Detroit's bankruptcy matter has been working its way through the court system since the city filed for Chapter 9 bankruptcy in July of last year. In December 2013 Rhodes ordered the city to renegotiate its bankruptcy-related financing with UBS and Bank of America, serving as the impetus for this week's proposed settlement between the parties. Earlier in December Rhodes ruled that Detroit is eligible and authorized to file for...
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Sunday, December 29, 2013
Police Salaries and Pensions Push California City to Brink
DESERT HOT SPRINGS, Calif. — Emerging from Los Angeles’s vast eastern sprawl, the freeway glides over a narrow pass and slips gently into the scrubby, palm-flecked Coachella Valley.
Turn south, and you head into Palm Springs with its megaresorts, golf courses and bustling shops. Turn north, and you make your way up an arid stretch of road to a battered city where empty storefronts outnumber shops, the Fire Department has been closed, City Hall is on a four-day week and the dwindling coffers may be empty by spring.
The city, Desert Hot Springs, population 27,000, is slowly edging toward bankruptcy, largely because of police salaries and skyrocketing pension costs, but also because of years of spending and unrealistic revenue estimates. It is mostly the police, though, who have found themselves in the cross hairs recently.
“I would not venture to say they are overpaid,” said Robert Adams, the acting city manager since August. “What I would say is that we can’t pay them.”
Though few elected officials in America want to say it, police officers and other public-safety workers keep turning up at the center of the municipal bankruptcies and budget dramas plaguing many American cities — largely because their pensions tend to be significantly more costly than those of other city workers.
Central Falls, R.I., went bankrupt in 2011 because its police and firefighters’ pension fund ran out of money. Vallejo, Calif., went bankrupt...
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Thursday, December 5, 2013
In Detroit Ruling, Threats to Promises and Assumptions
Someday, Detroit’s bankruptcy may well be seen as the start of an era of broken promises.
For years, cities have promised rock-solid pensions without setting aside enough money to pay for them, aided by lax accounting practices, easy borrowing and sometimes the explicit encouragement of labor unions.
Officials were counting on rich investment gains to fill the holes; unions and their retirees were counting on legal provisions — like Michigan’s Constitution — that said pensions were unassailable and that benefits would always be paid, whether through higher taxes or budget cutbacks elsewhere.
But a bankruptcy judge, Steven W. Rhodes, threw a wrench into that thinking on Tuesday, ruling that pension benefits could be reduced in a bankruptcy proceeding. The decision recast the landscape and gave distressed cities leverage to backtrack on their promises.
“Last night, as a public employees’ union leader, you went to bed thinking, ‘My workers’ pensions have special protection; I can continue to play hardball,’ ” Karol K. Denniston, a lawyer with the firm Schiff Hardin who has been advising residents of California cities on fiscal issues, said Tuesday after the judge issued his ruling. “This morning you woke up and found yourself in a new world.”
Public employees’ unions are already fighting back, though not against the chronic underfunding of their benefits. They are fighting the notion that...
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Saturday, August 3, 2013
Garlock testimony switches to financial liability
Asbestos companies have for decades attempted to limit their personal injury claims liability by filing for bankruptcy protection. The Union Asbestos and Rubber Company and Johns Manville were the first in a series of companies who have sough protection. Adequately funding an asbestos personal injury claims trust is essential to protect injured workers and other victims of asbestos disease, ie. asbestosis, lung cancer & mesothelioma. As long as asbestos is not banned in the US, it is critical that these trust adequately compensate the victims and potential victims for decades into the future.
Today's post was shared by Legal Newsline and comes from legalnewsline.com
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Attorneys transitioned Friday from days of expert testimony on the carcinogenic effects of asbestos and the work practices of attorneys representing asbestos plaintiffs to arguments about how much financial liability Garlock Sealing Technologies should face in the company’s ongoing bankruptcy trial.
Garlock attorneys called on economists to give the court estimates for how much money the company should place in a trust for future mesothelioma victims who might sue the company over exposure to asbestos from their products. Doing so will allow the company to escape bankruptcy.
Monday, July 2, 2012
The Stockton Senario: When the Municipality Goes Into Bankruptcy
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| Official seal of City of Stockton (Photo credit: Wikipedia) |
Stockton is self-insured:
"The City of Stockton is "self-insured" for workers' compensation benefits. The City pays benefits directly to injured employees rather than purchasing an insurance policy that would pay benefits.
"All employees of the City are eligible to receive workers compensation benefits if injured or made ill by their job. There is no qualification period for eligibility, such as working a minimum time period or a minimum number of hours per week. If an employee believes that he or she was injured on the job, a claim for benefits can be filed with the employee's supervisor.
Some states have backup coverage system in place to provide benefits and many do not. If the bankruptcy protection becomes a growing trend for municipalities, then the senario can become even more problematic.
Friday, May 4, 2012
Federal Court Rules That Bankruptcy Court May Transfer Insurance Assets to Trust
The Third Circuit Court of Appeals has ruled that a Bankruptcy Court is permitted to transfer insurance assets to a trust despite policy prohibitions.
"Federal–Mogul Global and its affiliates filed for Chapter 11 bankruptcy and sought to resolve asbestos-related liability through the creation of a personal-injury trust under 11 U.S.C. § 524(g). As part of its reorganization plan, it sought to transfer rights under insurance liability policies to the trust. Appellants Insurers had provided liability policies to the debtors prior to bankruptcy and objected that the transfer violated the policies' anti-assignment provisions. Federal–Mogul contended that 11 U.S.C. § 1123(a)(5)(B) preempts those provisions, and the bankruptcy and district courts agreed. We will affirm."
"In sum, section 524 trusts are the only national statutory scheme extant to resolve asbestos litigation through a quasi-administrative process. In function, the trusts are similar to workers' compensation or other administrative remedies that employ valuation grids to compensate injuries, subject to individualized and judicial review. Unlike those schemes, the trusts place the authority to adjudicate claims in private rather than public hands, a difference that has at times given us and other observers pause, since it endows potentially interested parties with considerable authority."
In re Federal-Mogul Global
--- F.3d ----, 2012 WL 1511773
C.A.3 (Del.),2012.
May 01, 2012
"Federal–Mogul Global and its affiliates filed for Chapter 11 bankruptcy and sought to resolve asbestos-related liability through the creation of a personal-injury trust under 11 U.S.C. § 524(g). As part of its reorganization plan, it sought to transfer rights under insurance liability policies to the trust. Appellants Insurers had provided liability policies to the debtors prior to bankruptcy and objected that the transfer violated the policies' anti-assignment provisions. Federal–Mogul contended that 11 U.S.C. § 1123(a)(5)(B) preempts those provisions, and the bankruptcy and district courts agreed. We will affirm."
"In sum, section 524 trusts are the only national statutory scheme extant to resolve asbestos litigation through a quasi-administrative process. In function, the trusts are similar to workers' compensation or other administrative remedies that employ valuation grids to compensate injuries, subject to individualized and judicial review. Unlike those schemes, the trusts place the authority to adjudicate claims in private rather than public hands, a difference that has at times given us and other observers pause, since it endows potentially interested parties with considerable authority."
In re Federal-Mogul Global
--- F.3d ----, 2012 WL 1511773
C.A.3 (Del.),2012.
May 01, 2012
Tuesday, July 12, 2011
Workers Compensation, Pensions and Bankruptcy
The rush to offset everything from workers compensation awards, including pensions, may cause some injured workers, to their longterm detriment, not to pursue a compensation claim. Should the pension be compromised in the future for lack of funding, as what is happening in a municipality in Rhode Island, then the injured worker maybe unable to seek workers' compensation because of a waiver for failing to file a claim originally. Injured workers and the attorneys may need to rethink their strategy for workers compensation.
Monday, May 9, 2011
Majestic Insurance Files for Bankruptcy
In re Majestic Capital Ltd, 11-36225, U.S. Bankruptcy Court, Southern District of New York (Poughkeepsie).
Majestic Capital, Ltd. (Majestic Capital) (Nasdaq: MAJC) today announced that on Friday, April 29, 2011, it commenced bankruptcy proceedings by filing a petition under Chapter 11 of the US Bankruptcy Code. Such filing was made in the United States Bankruptcy Court for the Southern District of New York (the "Court") and was assigned case no. 11-36225.
Simultaneously with such filing, the following Majestic Capital subsidiaries also commenced bankruptcy proceedings under the jurisdiction of the Court by filing petitions pursuant to Chapter 11 of the US Bankruptcy Code under the case numbers indicated below:
Name of Subsidiary Case No.
Majestic USA Capital, Inc. 11-36221
Compensation Risk Managers, LLC 11-36226
Compensation Risk Managers of California, LLC 11-36230
Eimar, LLC 11-36232
Embarcardero Insurance Holdings, Inc. 11-36234
Majestic Capital and its above-mentioned subsidiaries remain in possession of their respective assets and business, but subject to the supervision of the Court.
Trading in Majestic Capital's common stock on the Nasdaq Capital Market was halted today, and shall remain halted through the effective date of Majestic Capital's voluntary delisting pursuant to the notice of delisting that it filed with the SEC on April 29, 2011.
About Majestic Capital, Ltd.
Majestic Capital, through its subsidiaries, is a specialty provider of workers' compensation insurance products and services. Further information aboutMajestic Capital and its business can be found on Majestic Capital's website at http://www.MajesticCapital.com.
Majestic USA Capital, Inc. 11-36221
Compensation Risk Managers, LLC 11-36226
Compensation Risk Managers of California, LLC 11-36230
Eimar, LLC 11-36232
Embarcardero Insurance Holdings, Inc. 11-36234
Majestic Capital and its above-mentioned subsidiaries remain in possession of their respective assets and business, but subject to the supervision of the Court.
Trading in Majestic Capital's common stock on the Nasdaq Capital Market was halted today, and shall remain halted through the effective date of Majestic Capital's voluntary delisting pursuant to the notice of delisting that it filed with the SEC on April 29, 2011.
About Majestic Capital, Ltd.
Majestic Capital, through its subsidiaries, is a specialty provider of workers' compensation insurance products and services. Further information aboutMajestic Capital and its business can be found on Majestic Capital's website at http://www.MajesticCapital.com.
Wednesday, June 10, 2009
GM To Honor Most Pre-Petition WC Claims
Thursday, May 7, 2009
Automatic Stay Invoked in Chrysler Bankrutcy in MDL Action
On April 30, 2009 Chrysler LLC and certain domestic subsidiaries filed a voluntary petition for bankruptcy in the US Bankruptcy Court for the Southern District of NY under chapter 11 of title 11 of the USC. An automatic stay imposed under section 362 of the Bankruptcy Code has been invoked. A suggestion of Bankruptcy has been filed in MDL No, 875 (asbestos).
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