Awaiting a Critical Bankruptcy Ruling for the Surety Industry

By Lisa Tancredi and Laura Murphy (June 17, 2022, 1:54 p.m. EDT) — On June 6, the United States Court of Appeals for the Fifth Circuit heard oral argument in Argonaut Insurance Co. v. Falcon V LLC.

Before the court, at first glance, there is the question of the proper analysis of multilateral agreements, such as bonding programs, under Article 365 of the Bankruptcy Code. Surety bonds are essential to many business operations, but there are relatively few cases dealing with the treatment of surety bond programs in bankruptcy.

The Fifth Circuit’s decision will be critically important to the surety industry.

Bonding programs are three-party. A contract, law or regulation requires…

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Janet E. Fishburn