Goldberg Kohn Secures Major Victory for Beneficiaries of $440 Million Settlement

Supreme Court Clears The Way For $440 Million Settlement of Asbestos-Related Claims

June 19, 2009

Goldberg Kohn announced a major victory in the U.S. Supreme Court today for beneficiaries of a $440 Million settlement with Travelers Insurance in 2005 of asbestos-related claims. In a 7-2 majority ruling, the Court said that a 1986 global asbestos settlement  provided for in the Johns-Manville Corp. plan of reorganization shields Travelers Companies Inc., from new asbestos claims relating to Johns-Manville Corp.

The settlement had been approved in the Bankruptcy Court and District Court in the Johns-Manville case, but overturned by the Second Circuit Court of Appeals. The legal team, led by Ronald Barliant, Katie Pamenter (acting as counsel of record), and Kenneth Ulrich, working with Travelers, appealed to the Supreme Court, which reversed the Second Circuit.

"The opinion will be important in future Chapter 11 bankruptcy cases because it confirms the finality of plans of reorganization, even when plan provisions are attacked on the grounds of lack of jurisdiction," said Barliant, former United States bankruptcy judge for the Northern District of Illinois.

Goldberg Kohn, representing a group of the beneficiaries of the 2005 settlement (including a former asbestos worker turned attorney, Lawrence Madeksho), obtained affirmance of the 2005 settlement in the district court, but the Second Circuit reversed solely on the grounds that the bankruptcy court in 1986 did not have jurisdiction to enter the plan injunctions. In reversing the court of appeals, the Supreme Court made it clear that a bankruptcy court order confirming a plan of reorganization is final and cannot be attacked even on the grounds that the court lacked subject matter jurisdiction to approve a particular provision.

"Beginning even in the lower courts, we argued that the jurisdiction of the bankruptcy court to confirm the plan including the injunctions was beyond attack two decades later," said Barliant. "It is gratifying that the Supreme Court agreed."

*Ms. Pamenter is currently with The Garden City Group, Inc., online at www.gardencitygroup.com.