Chatz

INTRODUCTION

These consolidated bankruptcy appeals stem from Chapter 11 proceedings in Bankruptcy Court filed by debtors Chicago Fire Brick Co. ("CFB") and Wellsville Fire Brick Co. ("WFB") ("Debtors"), establishing a Liquidating Trust to handle asbestos-related claims and disbursements to claimants from debtors' insurance policies. Appellant Continental Casualty Company ("Continental"), an insurance company that insured debtors, appeals from two decisions from the Bankruptcy Court, the Hon. Roger L. Efremsky presiding. From the underlying bankruptcy matter, Continental appeals Judge Efremsky's decision denying Continental's motion for leave to have an Illinois court decide whether policy coverage existed for the claims the Liquidating Trust asserted against Continental. From the related adversary proceeding ("Adversary Proceeding"), Continental appeals from Judge Efremsky's decision finding Continental liable to the Trust for $3.5 million in claims, as well an award of penalties for Continental's vexatious conduct.

The heart of Continental's consolidated appeal is its argument that Judge Efremsky erred in preventing Continental from presenting its argument on the merits that…