Section 9701 - Definitions of general applicability

1 Analyses of this statute by attorneys

  1. Eleventh Circuit Rules that Coal Act Payment Obligations Arising in 2016 Were Discharged by 1995 Chapter 11 Plan

    Jones DayMark DouglasOctober 3, 2022

    r claims have been discharged in bankruptcy is a frequently litigated issue. This is particularly so in chapter 11 cases involving mass tort claims that may have technically "arisen" when the debtor manufactured or sold products before filing for bankruptcy, but where claimants may not become aware of their injuries until long after confirmation of a chapter 11 plan discharging pre-bankruptcy claims. The scope of a bankruptcy discharge also arises in chapter 11 cases where a debtor's payment obligation under a pre-bankruptcy or a pre-plan confirmation contract is not triggered until after confirmation of a chapter 11 plan.The U.S. Court of Appeals for the Eleventh Circuit recently examined this question in U.S. Pipe & Foundry Co. v. Holland (In re U.S. Pipe & Foundry Co.), 32 F.4th 1324 (11th Cir. 2022). A divided panel of the Eleventh Circuit ruled that certain debtors' alleged obligation to pay retiree health benefits mandated by the Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C. §§ 9701 et seq. (the "Coal Act"), were discharged in 1995 upon the confirmation of a chapter 11 plan, even though the payment obligation was not triggered until 2016. According to the majority, the payment obligation was a "claim" in 1995 and was therefore discharged upon confirmation of the debtors' plan.Discharge of Claims in BankruptcyBy design, the Bankruptcy Code is intended to deal with as many of a debtor's pre-bankruptcy obligations as possible in keeping with its core principles of affording the debtor with a "fresh start" and promoting equality of distribution among similarly situated creditors. This mandate is facilitated in part by the Bankruptcy Code's broad definition of "claim" to include nearly every conceivable pre-bankruptcy debt or obligation.A non-liquidating corporate debtor generally will be discharged from every "claim" that existed as of the bankruptcy petition date (and some that arose during the bankruptcy case) upon the confirmation of its chapter 11 plan of reorgan