MARY REICHARD, HOST: Our next episode of “The World and Everything in It” looks at three decisions handed down by the U.S. Supreme Court last week.
LINDSAY MAST, HOST: First, we have the unanimous opinion in Truck Insurance Exchange v. Kaiser Gypsum Company, which is a major change to bankruptcy law. Now, insurance companies that are financially responsible for paying bankruptcy claims can challenge Chapter 11 plans.
REICHERT: Here, thousands of people have sued two manufacturers of asbestos products, claiming that the products cause cancer. The companies filed for bankruptcy, and a judge approved a plan, but insurance companies are trying to step in because they don't think the plan adequately detects fraudulent claims.
Mast: But lower courts stuck to established practice and ruled that the insurance companies had no legal standing.
It is no longer established practice! The final ruling, delivered by Judge Amy Coney Barrett during oral arguments in March, can be heard in the following comments to the companies:
Judge Barrett: Why would you want to deny Trucks his case? What motivates you to fight so hard?
REICHALT: This means that the bankruptcy process may take longer, but it also means that more parties with an interest in the process will have a say.
Second, the IRS wins.
The two brothers were the sole shareholders of a building materials company, and they agreed that if either of them died, the company would use their life insurance money to buy back their shares.
Mast: One of the brothers died and the heirs reported their holdings as being worth $3 million, but the IRS valued them at over $5 million, which was the value of the company plus $3 million in life insurance.
This resulted in a tax bill of about $900,000, which the surviving siblings disputed.
REICHALT: But the Supreme Court agrees with the IRS.
Bottom line: This decision will impact business owners and require careful estate planning analysis for tax purposes.
MAST: The final ruling in Becerra v. San Carlos Apache Tribe is in, a 5-4 victory for Native Americans. The ruling holds that the federal Indian Health Service must reimburse tribes for overhead costs associated with running their own health care programs.
The opinion was written by Chief Justice John Roberts, who made his thinking clear in comments to government lawyers during oral argument in March:
JUSTICE ROBERTS: Under your approach, the further tribes move toward self-determination, the worse off they are: they bear more health care responsibility and they get a smaller percentage of their money back from the government.
REICHARD: This ruling means that federal support for tribal health programs must be on par with other Indian Health Service programs.
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