Monday, November 21, 2005
SCOTUS takes up whether unpaid worker compensation premiums are a priority debt against the debtors' estates, See 11 USC 507(a)(4); 4th circuit recently ruled premiums were priority debts, while in 1995 8th Circuit held they were not priority debtsUnited States: Bankruptcy: Priorities - Claim for Unpaid Workers’ Compensation Insurance Premiums (Supreme Court Docket Report – November 7, 2005)Mayer Brown & Platt Recently, the Supreme Court granted certiorari in one case of interest to the business community. Amicus briefs in support of the petitioner will be due on December 22, 2005, and amicus briefs in support of the respondent will be due on January 26, 2006. The case is Howard Delivery Service, Inc. v. Zurich American Insurance Co., No. 05-128 from the 4th Circuit. 8th Circuit case fromMinnesota in 1995 reached opposite conclusion: worker comp premiums are not priority debts, Employers Insurance of Wausau v HLM (In re HLM). For such a critical issue, the Congress apparently did not address the issue in the 2005 Bankruptcy Reform Act, because it did not amend directly 507(a) Mayer Brown Platt comments: "The Supreme Court’s decision in this case will obviously be of great interest to all insurance companies that provide workers’ compensation policies to employers, as the decision will establish whether priority under Section 507(a)(4) will be given to claims for unpaid workers’ compensation premiums. More generally this case is important to the business community at large, as it will affect the priority given to all unsecured debts of employers."
Posted by stan_sipple at 1:02 PM