The U.S. Trustee’s Office and two claimant groups filed objections to the proposed deal with the New Jersey Diocese and its insurers. They argue the settlement should be incorporated into the Diocese’s Chapter 11 plan instead of settled separately. The U.S. Trustee is claiming the deal is unreasonable and the two claimant groups argue that the deal would improperly force the claimants to give up their claims against insurance carriers and other parties. The other claimant group of abuse survivors disagree and argued the settlement cannot release their claims because under New Jersey law, the bankruptcy of an insured party does not release insurers from policy liability. “Thus, the statute contractually gives the survivors the opportunity to pursue claims directly against the insurers in the event insolvency of the Diocese prevents satisfaction of a judgment,” it stated.
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