In re United States Lines, Inc.
United States Court of Appeals for the Second Circuit
197 F.3d 631 (1999)
United States Lines, Inc. (Lines) (debtor), a shipping company, reorganized under chapter 11, with its successor-in-interest, the United States Lines Reorganization Trust (the Trust), taking over after the bankruptcy court confirmed the plan. Lines's 12,000 employee-creditors filed over 18,000 asbestos-injury claims, and the only funds available to pay them would come from insurance policies Lines held before filing for bankruptcy. The Trust brought an adversarial proceeding seeking a declaratory judgment on the insurers' obligations regarding those claims. The bankruptcy court found this was a core proceeding within its jurisdiction; the insurers appealed, and the district court reversed, holding insurance-contract disputes aren't core proceedings. The Trust appealed further.
Whether a proceeding related to a bankruptcy is a core proceeding under 28 U.S.C. section 157 if it will have a significant impact on the administration of the estate.