Partner Paul Zevnik was quoted in a Law360 article on the intersection of bankruptcy and insurance issues. The article examined how some of the complexities of successfully navigating liquidation or reorganization are amplified when insurance coverage disputes arise.
Companies following the path of bankruptcy must submit a list of assets and debts, then go through a process known as estimation and allowance of claims. That process can result in disputes, Paul explained. If the policyholder is facing “long-tail” asbestos, talc, silica, or environmental claims implicating multiple years, the cumulative value of those claims must be estimated and allowed. Therefore, the total liability is accelerated since it must be estimated at one moment in time.
“And the obligation of the insurers will be accelerated,” Paul said.
"That’s where the friction lies.”