In re United States Lines, Inc.

197 F.3d 631 (1999)

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In re United States Lines, Inc.

United States Court of Appeals for the Second Circuit
197 F.3d 631 (1999)

Facts

United States Lines, Inc. (Lines) (debtor) was a shipping company that filed for reorganization under chapter 11 of the bankruptcy code. Lines’s successor-in-interest was the United States Lines Reorganization Trust (the Trust). The Trust submitted a reorganization plan that the bankruptcy court confirmed. Lines’s creditors included 12,000 employees (creditors) who filed more than 18,000 claims for asbestos-related injuries incurred while working for Lines. The Trust alleged that these claims were covered by several insurance policies issued to Lines before Lines filed for bankruptcy. The proceeds from the insurance policies would be the only funds available to pay the employees’ injury claims. The Trust filed an adversarial proceeding in the bankruptcy court seeking a declaratory judgment establishing the obligations of the various insurers in regards to the asbestos claims. The bankruptcy court held that the proceeding was within its jurisdiction as a core bankruptcy proceeding. The insurers appealed. The district court reversed, holding that insurance contract disputes were not core proceedings. The Trust appealed.

Rule of Law

Issue

Holding and Reasoning (Walker, J.)

Concurrence (Calabresi, J.)

Concurrence (Newman, J.)

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