Court Rules that Insurer Cannot Benefit From A Policyholder's Bankruptcy

Gilbert LLP Wins Victory On Significant Issue In Favor of Asbestos Trust

Recently, the Washington, D.C.-based law firm Gilbert LLP announced that it had prevailed on an important issue on behalf of its client the ARTRA 524(g) Asbestos Trust when the United States District Court for the Northern District of Illinois ruled that an insurer's liability to the Trust is measured by the full value of each claim allowed by the Trust and not just the 7.5 cents on the dollar that the Trust can afford to pay. The court also held that the underlying insurance may be exhausted by the full value of each claim.

"This decision has major significance for bankrupt policyholders and trusts that are charged with collecting and distributing the debtor' insurance assets because it reaffirms the principle that insurers cannot benefit from a policyholder's bankruptcy or insolvency," said Mark Packman co-lead counsel and partner at Gilbert LLP. "The decision also is important because it