Since Prime Tanning did not appeal the ruling by the United States Bankruptcy Appellate Panel during the 30 day period following the Panel’s decision of August 15, 2013, the Panel formally mandated its decision on September 17, 2013. The ruling of the Bankruptcy Panel said the workers’ compensation self-insurance guaranty funds of the Prime Tanning Company are not part of the company’s estate. The concluding words of the Bankruptcy Panel’s thirty-nine page opinion were: “For the reasons set forth above, we conclude that Prime Tanning’s Bankruptcy Plan would violate applicable non-bankruptcy law and, therefore, may not be confirmed.” Summary of Prime Tanning Case: The Prime Tanning Company, as in leather tanning, is headquartered in Maine and has employees in Maine and Missouri. Prime Tanning declared bankruptcy in 2009. When its money was depleted, Prime Tanning began to pay its workers’ compensation obligations from its W.C. surety bond. In November 2011, the federal bankruptcy judge for the State of Maine issued a Preliminary Injunction, approving the bankruptcy plan of Prime Tanning. The plan’s provisions said funds dedicated to the payment of the self-insurance workers’ compensation obligations of Prime Tanning may be used for the benefit of all creditors of the company. The Maine Self-Insurance Guaranty Association and the Missouri Private Sector Individual Self-Insurance Guaranty Corporation testified against the bankruptcy plan. If the Preliminary Injunction became final, state workers’ compensation commissioners could no longer be assured that employees of self-insured companies with work-related injuries would receive the payments that the workers’ compensation courts had awarded the employees. A potential effect was the cancellation of the self-insurance of workers’ compensation. The Maine and Missouri Self-Insurance Guaranty Associations, as well as the state governments of Maine and Missouri, appealed the federal bankruptcy judge’s decision, which the National Council strongly and actively opposed. In August 2012, the U.S. Bankruptcy Court, District of Maine ruled that the surety bond and letters of credit posted by the Prime Tanning Company to secure its workers’ compensation obligations are not the property of the company’s estate. The Preliminary Injunction was overturned. Prime Tanning appealed the decision of the U.S. Bankruptcy Court, District of Maine. In response, the National Council filed an amicus brief with the Court, opposing the bankruptcy plan. Joining the Council in the brief were the California Self-Insurers Security Fund, California Self-Insurers Association and Safety National Casualty Corporation. The amicus brief was written by Dan Sovocool of the law firm of Nixon Peabody in San Francisco. On August 15, 2013, the United States Bankruptcy Appellate Panel affirmed the ruling of the U.S. Bankruptcy Court, District of Maine. The Panel stated the workers’ compensation self-insurance guaranty funds of the Prime Tanning Company are not the property of the company’s estate. On September 17, 2013, the Appellate Panel mandated its decision of August 15, 2013.
Posted on: Thu, 19 Sep 2013 22:08:40 +0000
Trending Topics
Recently Viewed Topics
© 2015