Bankruptcy Case Holds Implications for Thousands Injured by Asbestos Poisoning

On Friday, December 12, 2008, the United States Supreme Court heard the case of Travelers Indemnity Company vs. Bailey et al, a complicated bankruptcy case that was originally decided in federal bankruptcy court. The case involves an asbestos company, Johns Manville, that had been implicated in a class action suit involving approximately 16,000 people, who claimed damages relating to asbestos poisoning and exposure. The Travelers Indemnity Company, Johns Manville’s insurer at the time, subsequently came under legal fire when the plaintiffs asserted that Travelers had also known about the asbestos dangers and had failed to disclose their knowledge to the general public. The claim argued that Travelers should bear some culpability for injuries to the claimants.

According to the defense, the claimants targeted Travelers only because Johns Manville had earlier filed for bankruptcy to shield itself from the fallout from the class action suit.

The Supreme Court in this case found the insurers. The majority opinion agreed that the claimants’ case was invalid because it appeared to be designed in part to skirt a ban on lawsuits imposed by the bankruptcy.

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