Irving Tanning Company v. Maine Superintendent of Insurance
- Citation:
- In re Irving Tanning Co., BAP No. EB 12-077, 2013 WL 4400254 (1st Cir. BAP, Aug. 15, 2013)
- Tag(s):
-
- Ruling:
- Section 1123(a)(5), which provides for a plan’s implementation “[n]otwithstanding any otherwise applicable nonbankruptcy law” does not “permit the Debtors to overwrite” state self-insurance and property laws in order to compel turnover of self-insurance funds posted as security by the debtors as a source of funding for their plan.
- Procedural context:
- Six related debtors in jointly-administered cases appealed from the bankruptcy court for the District of Maine’s order denying confirmation of their joint liquating plan.
- Facts:
- Prior to the petition date, the debtors were engaged in the tanning, manufacture, and sale of leather. In the course of operating their respective businesses, the debtors maintained self-insurance programs for workers’ compensation claims. As security for their obligations under the workers’ compensation statutes, the debtors paid funds into trusts, established irrevocable letters of credit, and/or posted bonds. The liquidating plan provided that these funds were to be turned over to the debtors and a portion (roughly equal to the estimated amount of the claims against these funds) placed into an escrow account, which account would be the sole source of payment for these self-insurance claims. The balance would be available for the debtors to fund plan obligations.
- Judge(s):
- Lamoutte, Bailey, and Cabán
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