Can a bankruptcy court release non-debtor insurers from state law claims?

Verified source milestones

1. 2026-08-29 — An official oral-argument transcript was verified.

A citizen's guide to the whole case

What this case is about

Travelers Indemnity Company and other insurers funded a reorganization plan for Johns-Manville. A bankruptcy court approved this plan. The plan included releases for the insurers. Plaintiffs filed state law claims against these insurers. Travelers argues the bankruptcy court had jurisdiction to grant these releases. Plaintiffs argue the bankruptcy court lacked power to release non-debtors from state law claims.

How the case got here

The Supreme Court heard oral argument in this case on March 30, 2009.

What each side wants

Travelers wants the Supreme Court to confirm the bankruptcy court's release order. Travelers wants to block state law claims against the insurers. Travelers argues the bankruptcy court had jurisdiction to grant these releases.

Plaintiffs want the Supreme Court to reverse the Second Circuit's decision. Plaintiffs want to proceed with their state law claims against the insurers. Plaintiffs argue the bankruptcy court lacked power to release non-debtors from state law claims.

What each side says

Travelers argues the bankruptcy court had core jurisdiction to confirm the reorganization plan. Travelers argues the plan resolved present and future claims against Manville and its insurers. Travelers argues the release order was a proper exercise of bankruptcy power.

Plaintiffs argue the bankruptcy court cannot release non-debtors from state law claims. Plaintiffs argue the 1986 order gave Travelers broader protection than a standard discharge. Plaintiffs argue bankruptcy law does not erase a debtor's knowledge or grant immunity to non-debtors.

What the justices asked

Justice Souter asked if the 1986 order expressly allowed already-filed misconduct claims to proceed. Justice Souter asked if the bankruptcy court intended to bar only unfiled actions.

Justice Scalia asked if the challenge could be based on both jurisdiction and statute. Justice Scalia asked if some things simply do not fall within bankruptcy power. Justice Scalia asked if releasing non-debtors from state claims fits within bankruptcy power.

Why it matters

This case defines the limits of bankruptcy court power over non-debtors. It determines whether insurers can be released from state law claims. It affects the scope of reorganization plans involving third-party funding. It clarifies the boundary between federal bankruptcy jurisdiction and state law rights.

What happens next

This article currently covers the argument record. Use the official docket link for later case activity.

Official Court provenance

Official docket and case history · Official Supreme Court oral-argument detail page

Title and summary sources

• Official Supreme Court Transcript — file page 23, lines 7-19 — Transcript, file page 23, lines 7-19
• Official Supreme Court Transcript — file page 4, lines 21-47 — Transcript, file page 4, lines 21-47
• Official Supreme Court Transcript — file page 40, lines 35-47 — Transcript, file page 40, lines 35-47
• Official Supreme Court Transcript — file page 23, lines 7-19 — Transcript, file page 23, lines 7-19
• Official Supreme Court Transcript — file page 4, lines 21-47 — Transcript, file page 4, lines 21-47
• Official Supreme Court Transcript — file page 40, lines 35-47 — Transcript, file page 40, lines 35-47

Revision history

1. Revision 1 · Official Transcript · 2026-08-31 21:14:44.695372+00:00

   Correction: Rewritten to the concise citizen-facing editorial standard.

2. Revision 2 · Official Transcript · 2026-09-05 03:22:24+00:00

   Correction: Migrated to the dated official Court activity contract without model use.