In the second article of a Law360 Insurance Authority series exploring the intersection of bankruptcy and insurance issues, partner Paul Zevnik noted that prior to the enactment of Section 524(g), asbestos bankruptcies were hotly contested. However, since the enactment, he pointed out that nearly half of such bankruptcies that are successful are prepackaged agreements, or "prepacks."
“There has certainly been a movement since then towards trying to get all constituencies to the table and get a plan resolved before spending the staggering amounts of money that are necessary in order to adjudicate a contested bankruptcy and contested insurance coverage situation,” Paul said.