Settlement with Bankrupt Defendant Void Without Pre-Petition Release, Court Says

NEW ORLEANS - A federal judge has affirmed a decision that prevented payment on an asbestos settlement that was negotiated between a former steel worker and Babcock & Wilcox before the company filed for Chapter 11 reorganization. In Re: The Babcock and Wilcox Co.; Charles Rovida v. Babcock & Wilcox Co., et al., No. 02-0336 (E.D. La.).

Judge Sarah S. Vance of the U.S. District Court for the Eastern District of Louisiana ruled on Aug. 13 that the applicable settlement agreement, which was first negotiated nearly 15 years ago, is not valid now that B&W is in bankruptcy because a …