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In brief
Overview
According to Petitioners, the dispute concerns whether workers’ compensation insurance policy receivables are covered by the bankruptcy priority provision of 11 U.S.C. § 507(a)(4).
Background and question before the Court
Petitioners argue that bankruptcy priorities must be expressly granted by statute; the default rule is equal priority and distribution.
Petitioners contend that Zurich must show its workers’ compensation insurance policy receivables fall within the statutory phrase of § 507(a)(4), i.e., contributions to an employee benefit plan arising from services rendered within 180 days.
According to Mr. Strain, petitioners assert that legislative history shows no intent to incorporate the ERISA definition into the bankruptcy statute, and that doing so would be improper.
According to Petitioners (counsel MR. VERRILLI), respondents argue that the statute expressly prohibits subrogation and therefore does not allow a secondary insurer such as a bank with letters of credit to obtain priority.
According to Respondents (counsel MR. STRAIN), respondents maintain that incorporating the ERISA definition into the bankruptcy statute is improper, citing United States v. Reorganized CF&I.
What each side argues
Petitioners’ Position
According to Petitioners, bankruptcy priorities must be clearly granted by statute; the default rule is equal priority and distribution.
According to Petitioners, zurich must demonstrate that its workers’ compensation insurance policy receivables are clearly included within § 507(a)(4).
According to Mr. Strain, legislative history shows no intention to incorporate the ERISA definition into the bankruptcy statute; doing so would be improper.
According to Mr. Verrilli, a workers’ compensation plan provides health insurance for medical costs of workplace accidents and disability insurance.
Respondents’ Position
According to Petitioners (counsel MR. VERRILLI), the statute expressly prohibits subrogation; therefore a secondary insurer such as a bank with letters of credit does not obtain priority.
According to Respondents (counsel MR. STRAIN), incorporating the ERISA definition into the bankruptcy statute is improper, as reflected in United States v. Reorganized CF&I.
What happened at oral argument
Oral argument in this case began at 10:13 a.m. before the Supreme Court.
What the Court decided
Why it matters
Terms to know
No glossary terms are available for this guide.
Primary sources
Read the source materials on the official site or open the immutable repository copy used for this guide.
- e04137e6fbfaf98a8ef7-r1-721d826b4efee1f1.pdforal argument transcript
Guide generated September 21, 2026. Automated validation accepted this version.