Fireman's Fund Ins. v. Plant Insulation Co.

ORDER DENYING APPEAL FROM CONFIRMATION OF RESTATED SECOND AMENDED PLAN OF REORGANIZATION

I. INTRODUCTION

This case confronts the legal, financial, and logistical challenges posed by reorganization of a debtor under Chapter 11 of the Bankruptcy Code, when its liabilities include the claims of future victims of asbestos. The debtor in this matter, Plant Insulation Company, sold, installed, and repaired asbestos-containing insulation and fireproofing materials in Northern California starting in 1937, and for many years acted as the exclusive distributer for asbestos producer Fibreboard Company. In the late 1970s, thousands of individuals began to file suit against Plant, claiming they had incurred injuries as a result of inhaling asbestos fibers from materials sold, installed, or repaired by the company. Until 1989, Plant was indemnified by Fi-breboard, and thereafter, by its own insurers. By 2001, however, all of Plant’s insurers had declared their policies to be exhausted and proceeded to defend much of the ongoing litigation under a reservation of rights only to avoid incurring default judgments. In that same year, Plant ceased operations under its own name, and transferred its…