Although decades have passed since asbestos was ubiquitous at industrial sites and operations around the United States, litigation over bodily injuries allegedly caused by historic exposures to asbestos continues in a significant way across the country. Many defendants find themselves in the position of relying on limited, decades-old insurance assets to fund the defense and resolution of asbestos claims, hoping that the insurance assets can somehow outlast the claims in the tort system. Yet, absent careful planning about what an ultimate end-strategy should look like, a defendant can find itself facing a host of problems beyond the asbestos cases themselves once those insurance assets have been exhausted. A situation that developed recently in a Chapter 7 bankruptcy case illustrates some of those potential problems, and offers a cautionary tale to asbestos defendants who are watching their insurance assets dwindle as claims continue to be filed.

On Oct. 19, 2021, The Nash Engineering Co. filed for Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the District of Connecticut (Case No. 21-50644). Founded in 1905, Nash was a manufacturer of compressors, blowers and vacuum pumps. Its use of asbestos in its products during the mid-20th century led it to become a defendant in thousands of asbestos-related bodily injury cases in the tort system. To defend and resolve those cases, Nash called on historic liability insurance policies that provided coverage for (among other things) asbestos-related liabilities. Over time, Nash executed settlements with its insurers, which released the insurers of obligations for paying future costs in exchange for cash payments.

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