In a declaratory judgment action, the U.S. District Court for the Middle District of Georgia held that an insurer had no obligation to indemnify an insured for a post-bankruptcy state court judgment where the claimants had previously executed a general release extinguishing the insured’s tort liability because the policy covered only amounts the insured was “legally obligated to pay.” Ironshore Specialty Ins. Co. v. Logan, 2026 WL 401195 (M.D. Ga. Feb. 12, 2026).
The insured, a long-term care facility, faced a personal injury claim in state court that was stayed during its Chapter 11 bankruptcy proceedings. Under a confirmed liquidation plan, the personal injury claimants accepted payment from a “Tort Claimants Trust” in exchange for a general release of the insured, though the release purported to preserve claims against the insured’s insurers. The claimants subsequently proceeded to trial in state court against the insured facility, obtaining a $2.1 million judgment, which they
