New York Court Permits Asbestos Claimants to Proceed Against Insurers with Buyout Agreements

Three judges sitting behind bench

A recent New York federal district court decision addresses a number of issues in the context of asbestos coverage involving an insolvent insured.

December 6, 2021
Patricia B. Santelle & Frank J. Perch, III - White and Williams LLP

A recent New York federal district court decision addresses a number of issues in the context of asbestos coverage involving an insolvent insured, holding that policy buyout agreements between the insured and its insurers did not bar actions by certain tort judgment creditors against some of the settling insurers, and further finding that such agreements can constitute fraudulent conveyances, especially where the proceeds of the settlement are not reserved for payment of insured claims.

In the litigation pending in the Western District of New York (Mineweaser v. One Beacon Insurance Company, et al., No. 14-CV-0585A), certain asbestos plaintiffs sought recovery from excess insurers for judgments obtained against an insolvent asbestos supplier (Hedman Resources, formerly known as Hedman Mines), which ceased operations in 2007 due to insolvency. Hedman had at one time been a subsidiary of Gulf & Western. As of 2009-2011, the excess insurers of Gulf & Western were advised of exhaustion of primary insurance as well as Hedman’s insolvency.

Reprinted courtesy of Patricia B. Santelle, White and Williams LLP and Frank J. Perch, III, White and Williams LLP

Ms. Santelle may be contacted at santellep@whiteandwilliams.com
Mr. Perch may be contacted at perchf@whiteandwilliams.com



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