The Fourth Circuit Court of Appeals held that a plan proposal to create an asbestos trust through Chapter 11 bankruptcy was “insurance neutral,” and the debtor’s insurer was not a party in interest under Code § 1109(b), which contains a noncomprehensive list of parties in interest to a Chapter 11 case. Whether the insurer was a party in interest determined whether it had standing to appeal the confirmation order. The issue before the Supreme Court may require consideration of the scope of standing for plan objection as well as appeal. The Court’s decision should be watched for any potential Chapter 13 impacts, but it is unlikely that the decision will address Chapter 13 confirmation.
Code § 1325(b) provides that “the trustee or the holder of an allowed unsecured claim” may object to confirmation, and in event of such objection, the tests of whether a plan satisfies subsections 1325(b)(A) or (b) come into play. Section 1325(a)(5) addresses confirmation requirements for allowed secured claims. These confirmation requirements and related standing triggers present different issues than are raised in the Kaiser Gypsum appeal.
