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Protecting the Rights of Insureds in Bankruptcy Proceedings

Colette L. Kopon and Michael A. Airdo won a major victory in Bankruptcy Court for the Northern District of Illinois on August 1, 2018. The Court found in favor of all parties objecting to a proposed settlement between the Trustee and an insurance carrier that would have otherwise enjoined the objecting parties from pursuing their rights under the insurance policy at issue.

The objecting parties face potential litigation on E. coli claims arising from contaminated food products, with liability exposures alleged to be in excess of $70 million. The Court, referencing Ms. Kopon’s oral argument, acknowledged the possibility that such an injunction would leave the objecting parties to cover significant liabilities and, ultimately, refused to enjoin the objecting parties from pursuing defense, indemnification, and bad faith claims under the policy against the carrier. To view the Court’s opinion, click here.