Court Opinion

ID: 2685093
Source: CourtListenerOpinion
Date Created: 2014-07-22 15:00:09.879971+00
Date Added: 2024-06-11T09:44:08.741478
License: Public Domain

12-1094-bk(L)
     In Re: JOHNS-MANVILLE CORPORATION Common Law Settlement Counsel, et al.
     v. The Travelers Indemnity Co., et al.

 1                          UNITED STATES COURT OF APPEALS

 2                              FOR THE SECOND CIRCUIT

 3                                August Term, 2012

 4   (Argued:    January 10, 2013                    Decided: July 22, 2014)

 5      Docket Nos. 12-1094-bk(L), 12-1150-bk(Con), 12-1205-bk(Con)

 6   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
 7   IN RE: JOHNS-MANVILLE CORPORATION, MANVILLE CORPORATION, MANVILLE
 8   INTERNATIONAL CORPORATION, MANVILLE EXPORT CORPORATION,
 9   JOHNS-MANVILLE INTERNATIONAL CORPORATION, MANVILLE SALES
10   CORPORATION, f/k/a JOHNS-MANVILLE SALES CORPORATION, successor by
11   merger to MANVILLE BUILDINGS MATERIALS CORPORATION, MANVILLE
12   PRODUCTS CORPORATION and MANVILLE SERVICE CORPORATION, MANVILLE
13   INTERNATIONAL CANADA, INC., MANVILLE CANADA, INC., MANVILLE
14   INVESTMENT CORPORATION, MANVILLE PROPERTIES CORPORATION,
15   ALLAN-DEANE CORPORATION, KEN-CARYL RANCH CORPORATION,
16   JOHNS-MANVILLE IDAHO, INC., MANVILLE CANADA SERVICE INC., SUNBELT
17   CONTRACTORS, INC.,
18
19               Debtors.
20   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
21   COMMON LAW SETTLEMENT COUNSEL, STATUTORY AND HAWAII DIRECT ACTION
22   SETTLEMENT COUNSEL,
23
24               Movants-Appellants,
25
26   ASBESTOS PERSONAL INJURY PLAINTIFFS,
27
28               Interested Parties-Appellants,
29
30                  v.
31
32   THE TRAVELERS INDEMNITY COMPANY, TRAVELERS CASUALTY AND SURETY
33   COMPANY, f/k/a AETNA CASUALTY AND SURETY COMPANY,
34
35              Objectors-Appellees.*
36   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
37   __________
38        *The Clerk of the Court is instructed to conform the caption in
39   accordance herewith.
40
41
 1   B e f o r e:      WINTER, POOLER, and CHIN, Circuit Judges.
 2
 3        Appeal from a judgment of the United States District Court
 4   for the Southern District of New York (John G. Koeltl, Judge),
 5   reversing the bankruptcy court’s final judgment (Burton R.

 6   Lifland, Judge) that had enforced settlement agreements and

 7   compelled appellees to make payments to asbestos plaintiffs under

 8   the agreements.    We vacate the district court’s order and order

 9   reinstatement of the final judgment of the bankruptcy court.

10                               PAUL D. CLEMENT (Matthew Gluck & Kent A.
11                               Bronson, Milberg LLP, New York, NY, on
12                               the brief), Bancroft PLLC, Washington,
13                               D.C., for Movant-Appellant Statutory and
14                               Hawaii Direct Action Settlement Counsel.
15
16                               RONALD BARLIANT (Kenneth S. Ulrich &
17                               Danielle Wildern Juhle, on the brief),
18                               Goldberg Kohn Ltd., Chicago, IL, for
19                               Movant-Appellant Common Law Settlement
20                               Counsel.
21
22                               SANDER L. ESSERMAN (Cliff I. Taylor, on
23                               the brief), Stutzman, Bromberg, Esserman
24                               & Plifka, P.C., Dallas, TX, for
25                               Interested Parties-Appellants Asbestos
26                               Personal Injury Plaintiffs.
27
28                               BARRY R. OSTRAGER (Andrew T. Frankel,
29                               Jonathan M. Weiss & Bryce A. Pashler, on
30                               the brief), Simpson Thacher & Bartlett
31                               LLP, New York, NY, for Objectors-
32                               Appellees The Travelers Indemnity
33                               Company & Travelers Casualty and Surety
34                               Company.
35
36   WINTER, Circuit Judge:
37
38        Common Law Settlement Counsel, Statutory and Hawaii Direct

39   Action Settlement Counsel, and Asbestos Personal Injury

                                        2
 1   Plaintiffs1 appeal from Judge Koeltl’s reversal of a bankruptcy

 2   court’s final judgment.       Bankruptcy Judge Lifland had required

 3   appellees -- The Travelers Indemnity Company and Travelers

 4   Casualty and Surety Company (together, “Travelers”) -- to pay

 5   over $500 million to asbestos plaintiffs based on Travelers’

 6   obligations under certain settlement agreements (the

 7   “Agreements”).     The district court reversed, holding that

 8   conditions precedent to payment under the Agreements were never

 9   met, and that Travelers’ obligation to pay therefore never

10   matured.

11         Because we conclude that the relevant conditions precedent

12   were satisfied, we vacate the district court’s order and remand

13   with instructions to reinstate the bankruptcy court’s final

14   judgment.    In addition, given that Travelers did not timely raise

15   its arguments regarding the Agreements’ conditions that the

16   movants either execute a specific number of releases and deliver

17   them into escrow or dismiss their claims with prejudice, we deem

18   those arguments waived.       Finally, we hold that the bankruptcy

19   court correctly applied prejudgment interest to the amount owed

20   and that it correctly calculated the total payment due from the

21   appropriate date.

22

23

           1
             The nature of the various appellants will become clear, to the extent
     relevant, in the course of this opinion. The Asbestos Personal Injury
     Plaintiffs are six asbestos personal injury claimants who stand to recover
     from the Common Law Settlement Trust.

                                           3
 1                                   BACKGROUND

 2       For many years, Travelers was the primary insurer for the

 3   Johns-Manville Corporation (“Manville”), once the largest

 4   supplier of asbestos and asbestos-containing products.            In re

 5   Johns-Manville Corp. (Manville I), Nos. 82 B 11656, 82 B 11657,

 6   82 B 11660, 82 B 11661, 82 B 11665, 82 B 11673, 82 B 11675, 82 B

 7   11676(BRL), 2004 WL 1876046, at *2-3 ¶¶ 1, 3, *5 ¶ 12 (Bankr.

 8   S.D.N.Y. Aug. 17, 2004).      In 1982, after asbestos-related health

 9   problems triggered litigation, Manville, faced with the prospect

10   of tremendous liability, filed a Chapter 11 petition for
11   bankruptcy protection and reorganization.         In re Johns-Manville
12   Corp. (Manville II), 340 B.R. 49, 54 (S.D.N.Y. 2006); Travelers

13   Indem. Co. v. Bailey, 557 U.S. 137, 140 (2009).

14        With Manville entangled in bankruptcy proceedings, asbestos

15   plaintiffs began to file direct-action2 suits against Travelers

16   and other insurers based on the insurers’ relationships with

17   Manville.    Manville II, 340 B.R. at 55.       At the same time,

18   Travelers and other insurers were involved in a policy-coverage

19   dispute with Manville, and numerous contribution, indemnity, and
20   cross claims were asserted among Manville’s insurers.            Id.;
21   Manville I, 2004 WL 1876046, at *14-15 ¶¶ 54, 57.

22        Consequently, Travelers and the other insurers entered into

23   a settlement agreement with Manville.         Pursuant to the

          2
             A “direct action” is “[a] lawsuit by a person claiming against an
     insured but suing the insurer directly instead of pursuing compensation
     indirectly through the insured.” Black’s Law Dictionary 525 (9th ed. 2009).

                                          4
 1   settlement, Travelers agreed to contribute roughly $80 million to

 2   a trust established as part of the bankruptcy estate (the

 3   “Manville Trust”) in exchange for a complete release of Manville

 4   policy-related liabilities.    Manville I, 2004 WL 1876046, at *15

 5   ¶¶ 58, 61.    The bankruptcy court provided extensive notice

 6   regarding the settlement, and it also appointed a Future Claims

 7   Representative (“FCR”) to represent future asbestos claimants

 8   during relevant proceedings.     In re Johns-Manville Corp.

 9   (Manville IV), 600 F.3d 135, 140-41 (2d Cir. 2010).
10           The bankruptcy court eventually approved the settlement and

11   entered two orders, the Insurance Settlement Order and the

12   Confirmation Order (together, the “1986 Orders”).    Manville I,

13   2004 WL 1876046, at *15-16 ¶¶ 60-61, 64.    The 1986 Orders were

14   “meant to provide the broadest protection possible to facilitate

15   global finality for Travelers as a necessary condition for it to

16   make a significant contribution to the Manville estate.”      Id. at

17   *31 ¶ 23.    The Insurance Settlement Order released Travelers and

18   the other settling insurers from Manville-related obligations,

19   enjoined “all future claims for bad faith or insurer misconduct,”
20   and channeled all such claims to the Manville Trust.    Id. at *15
21   ¶ 61.    The Confirmation Order confirmed Manville’s reorganization

22   plan, incorporating the Insurance Settlement Order by reference

23   and enjoining “all persons from commencing any action against any

24   of the Settling Insurance Companies for the purpose of, directly

25   or indirectly, collecting, recovering or receiving payment of, on

                                        5
 1   or with respect to any Claim . . . or Other Asbestos

 2   Obligation . . . .”   Id. at *16 ¶ 64 (internal citation and

 3   quotation marks omitted).

 4        Despite the 1986 Orders, asbestos plaintiffs filed more

 5   actions against Travelers in several states.   Id. at *17 ¶ 70.

 6   The majority of these claims did not allege violations derivative

 7   of Manville’s actions; instead, they were based on Travelers’ own

 8   alleged wrongdoing as Manville’s insurer.   Although it is a

 9   misnomer, see infra note 3, we will style these claims as the

10   “Direct Actions.”   The Direct Actions were brought by three

11   categories of plaintiffs.   We will call them the “Statutory

12   Direct Action Plaintiffs,” “Hawaii Direct Action Plaintiffs,” and

13   “Common Law Direct Action Plaintiffs.”   They asserted two

14   categories of claims.   First, the Statutory Direct Action

15   Plaintiffs and Hawaii Direct Action Plaintiffs alleged, among

16   other things, that Travelers “conspired to violate state laws

17   prohibiting unfair insurance . . . practices” by fraudulently
18   perpetuating a “state of the art” defense, id. at *18-19 ¶¶ 74-
19   79, and allegedly misrepresenting Manville’s knowledge of
20   asbestos hazards.   Second, the Common Law Direct Action

21   Plaintiffs claimed similarly that Travelers violated common law

22   duties when it failed to disclose what it knew about asbestos

                                      6
 1   hazards from its relationship with Manville.           Id. at *19 ¶¶

 2   80-82.3

 3         Relying on the 1986 Orders, in June 2002, Travelers moved

 4   before the bankruptcy court to enjoin the Direct Actions.

 5   Manville II, 340 B.R. at 55.        The bankruptcy court issued a

 6   temporary restraining order against prosecution of certain

 7   lawsuits against Travelers but also referred the matter to

 8   mediation.    Id.   The mediation, conducted by former New York

 9   Governor Mario M. Cuomo, resulted in the three Settlement

10   Agreements between Travelers and the Statutory, Hawaii, and
11   Common Law Direct Action Plaintiffs.         In re Johns-Manville Corp.
12   (Manville III), 517 F.3d 52, 58 (2d Cir. 2008); Manville I, 2004

13 WL 1876046, at *1, *22-23 ¶¶ 96, 101, 105.          In all, Travelers

14   agreed to pay up to $360 million to the Statutory Plaintiffs, up

15   to $15 million to the Hawaii Plaintiffs, and up to $70 million to

16   the Common Law Plaintiffs, in three respective funds separate

17   from the Manville Trust.       Manville I, 2004 WL 1876046, at *22-23

18   ¶¶ 96, 101, 105.

19         Under the Agreements, the Direct Action Plaintiffs were to
20   be paid from the funds, but only after three conditions were
21   satisfied.    Id. at *22 ¶¶ 96-100.       These conditions, described in

22   detail immediately infra, concerned the breadth of an order to be

           3
             As noted by the Supreme Court in Travelers Indem. Co. v. Bailey, 557
U.S. 137, 143 n.2 (2009), these suits were not direct actions “in the terms of
     strict usage,” because they sought “to hold Travelers liable for independent
     wrongdoing rather than for a legal wrong by Manville.” Nevertheless, because
     all courts in the course of this litigation have dubbed these suits “direct
     actions,” we do so here. See In re Johns-Manville Corp. (Manville IV), 600
F.3d 135, 142 (2d Cir. 2010).

                                           7
 1   entered by the bankruptcy court (“Clarifying Order”) regarding

 2   the interpretation of the 1986 Orders, the finality of the

 3   Clarifying Order, and various provisions regarding disposal of

 4   the Direct Actions.

 5         First, the Agreements required that the bankruptcy court,

 6   once it approved the settlements, enter a “Clarifying Order.”

 7   The Statutory and Hawaii Direct Action Settlement Agreements

 8   required that the Clarifying Order “contain[] prohibitions

 9   against Claims at least as broad as those contained in Exhibit

10   A.”   App. at 231, 269.     Similarly, the Common Law Direct Action

11   Agreement required that the Clarifying Order contain language
12   “substantially in the form” of Exhibit A.4          Id. at 307.

13         Exhibit A of each Agreement was a proposed Clarifying Order

14   containing provisions barring all claims against Travelers

15   arising out of, or relating to, Travelers’ handling of asbestos-

16   related claims, including contribution and indemnity claims.              The

17   proposed Clarifying Order also expressly barred the new,

18   nonderivative Direct Actions that were the subject of the

19   settlements.    Finally, each Exhibit A conveyed that the proposed

20   Clarifying “Order is an order clarifying the Confirmation Order

21   [of the 1986 Orders]” and that all the barred claims listed

           4
             Although the language of the Common Law Direct Action Settlement
     Agreement differs somewhat from that of the Statutory and Hawaii Direct Action
     Settlement Agreements, we find, as did both the district court and the
     bankruptcy court, that the distinctions are not meaningful with regard to the
     issues on appeal. See In re Johns-Manville Corp. (Manville VI), 845 F. Supp.
2d 584, 588 & nn.4&6 (S.D.N.Y. 2012); In re Johns-Manville Corp. (Manville V),
     440 B.R. 604, 612 n.12 (Bankr. S.D.N.Y. 2010). We therefore reject the Common
     Law Settlement Counsel’s arguments that rely on supposed differences in the
     Agreements’ language.

                                           8
 1   within the proposed Clarifying Order were “covered by the

 2   Confirmation Order and permanently enjoined as against Travelers,

 3   which [was] released therefrom under the Confirmation Order.”

 4   Id. at 245, 283.

 5        Second, the Clarifying Order had to become a “Final Order”

 6   under the Agreements’ definition, i.e., an order from which no

 7   appeal is taken, or an order that has been “affirmed by the

 8   highest court to which such order was appealed or certiorari has

 9   been denied and the time to take any further appeal or petition
10   for certiorari shall have expired.”    Id. at 228, 265, 304.

11        Third, another set of conditions precedent required either

12   the execution and delivery into escrow of at least 49,000 general

13   releases of claims (under the Statutory Direct Action Settlement

14   Agreement), at least 14,000 general releases of claims against

15   Travelers (under the Common Law Direct Action Settlement

16   Agreement), or dismissals with prejudice of all named plaintiffs’

17   pending claims against Travelers (under the Hawaii Direct Action

18   Settlement Agreement).

19        With the Agreements in place, the parties moved for the
20   bankruptcy court’s approval in 2004.   Manville I, 2004 WL
21   1876046, at *1.    Various third parties filed objections,

22   including Chubb Indemnity Insurance Company (“Chubb”).   Chubb had

23   issued asbestos-related insurance policies -- although it never

24   insured Manville -- and complained that any potential

25   contribution and indemnification claims it might have against

26   Travelers would be unlawfully barred if the Clarifying Order were

                                       9
 1   entered by the bankruptcy court.           Manville II, 340 B.R. at 54,

 2   56; see also Manville IV, 600 F.3d at 143-44.           Chubb and the

 3   other objectors argued that the bankruptcy court lacked subject

 4   matter jurisdiction to enjoin third parties’ Direct Actions and

 5   related claims against nondebtors.          Additionally, Chubb objected

 6   on due process grounds, arguing that it could not be bound by the

 7   Clarifying Order because it had never received constitutionally

 8   sufficient notice of the 1986 Orders.          Manville IV, 600 F.3d at

 9   143, 147.

10         On August 17, 2004, the bankruptcy court rejected the

11   objections and approved all three Agreements.           It also entered

12   the Clarifying Order (the “2004 Orders”).          The language of the

13   Clarifying Order was substantially the same as the language

14   contained in each Agreement’s appended Exhibit A.            The bankruptcy

15   court concluded that it had authority to enter both the

16   Clarifying Order and the 1986 Orders, and that the Direct Actions

17   -- and related contribution and indemnity claims -- were barred
18   by the 1986 Orders.5     Manville I, 2004 WL 1876046, at *26-28 ¶¶

19   1-9, *30-34 ¶¶ 17-35.
20         Chubb and the other objectors appealed.          The district court

21   affirmed the bankruptcy court’s order in all material respects.

           5
             Specifically, the bankruptcy court determined that potential claims by
     insurers such as Chubb were properly barred by the 1986 Orders. In re
     Johns-Manville Corp. (Manville I), Nos. 82 B 11656, 82 B 11657, 82 B 11660, 82
     B 11661, 82 B 11665, 82 B 11673, 82 B 11675, 82 B 11676(BRL), 2004 WL 1876046,
     at *34 ¶ 38 (Bankr. S.D.N.Y. Aug. 17, 2004); see also id. at *33-34 ¶¶ 34-35.
     Additionally, the bankruptcy court reasoned that a “judgment reduction
     provision” “protect[ed] the interests of non-settling defendants in the direct
     action claims so completely as to render their objections to the settlements
     moot.” Id. at *34 ¶ 38.

                                           10
 1   It concluded that the bankruptcy court had authority to enter the

 2   Clarifying Order because it had jurisdiction to enter the 1986

 3   Orders and that the Clarifying Order interpreted and enforced

 4   those orders.   Manville II, 340 B.R. at 59-67.   The district

 5   court also reasoned that Chubb, a sophisticated insurer, received

 6   sufficient notice regarding its purported claims.   Id. at 68.     It

 7   determined further that, even if notice in the usual sense was

 8   lacking, Chubb’s claims could be foreclosed upon because of the

 9   special nature of the remedial scheme at issue:   reorganization
10   of the bankruptcy estate.   Id. at 68-69.
11        The objectors appealed again, and this court vacated and

12   remanded, concluding that entry of the 1986 Orders (as

13   interpreted by the Clarifying Order) exceeded the proper bounds

14   of the bankruptcy court’s jurisdiction insofar as they enjoined

15   state-law claims, nonderivative of the debtor’s wrongdoing, that

16   did not seek recompense from the Manville corpus.   Manville III,

17 517 F.3d at 61-68.   Having vacated on these grounds, this court

18   deemed it unnecessary to reach Chubb’s due process argument.     Id.

19   at 60 n.17.
20        The Supreme Court granted certiorari and then reversed.
21   Bailey, 557 U.S. at 137, 147.   The Court held that the Direct

22   Actions were -- and always had been -- barred by the 1986 Orders,

23   and it concluded that this court had erred in reevaluating the

24   bankruptcy court’s jurisdiction to enter those orders:   “the 1986

25   Orders became final on direct review over two decades ago”;

26   “whether the Bankruptcy Court had jurisdiction and authority to

                                     11
 1   enter the injunction in 1986 was not properly before th[e Court]

 2   in 2008 . . . .”   Id. at 148.

 3        The Court concluded that the Clarifying Order’s entry was a

 4   proper exercise of the bankruptcy court’s jurisdiction because it

 5   “plainly had jurisdiction to interpret and enforce its own prior

 6   orders.”   Id. at 151.   The Clarifying Order, therefore, did not

 7   expand the scope of the 1986 Orders.      The Court did not

 8   determine, however, whether any parties in particular were bound

 9   by the 1986 Orders, nor did it assess the propriety, as a general

10   matter, of a bankruptcy court enjoining third-party claims

11   against nondebtors that were not derivative of the debtor’s
12   wrongdoing.   See id. at 155.    The Supreme Court remanded for this

13   court to consider whether Chubb was bound by the 1986 Orders and

14   the Clarifying Order.    Id. at 155-56.

15        On remand, this court concluded that Chubb was not bound by

16   the 1986 Orders -- nor, by extension, the Clarifying Order --

17   because it had not been afforded constitutionally sufficient

18   notice of the 1986 Orders and their attendant proceedings.
19   Manville IV, 600 F.3d at 138, 148-49, 158.      Underpinning this
20   holding was the determination that the bankruptcy court

21   interpreted the 1986 Orders to have in personam, not just in rem,

22   effect.    Id. at 153-54.   This court expressly refused to

23   determine the effect of this holding on the Agreements, however,

                                       12
 1   leaving remaining issues to be resolved by “the parties, with the

 2   aid of the bankruptcy court.”        Id. at 159.6

 3         In September 2010, counsel for the Direct Action Plaintiffs,

 4   claiming that all the conditions precedent had been satisfied,

 5   moved before the bankruptcy court to compel Travelers to make the

 6   payments required by the Agreements.         Travelers objected,

 7   contending only that the breadth and finality conditions

 8   precedent to payment under the Agreements were unsatisfied

 9   because Chubb was now free to bring claims against it.             In re
10   Johns-Manville Corp. (Manville V), 440 B.R. 604, 613-15 (Bankr.
11   S.D.N.Y. 2010).

12         The bankruptcy court granted the Direct Action Settlement

13   Counsel’s motions to compel.        See id. at 615.     The court

14   concluded that the disputed conditions precedent had been

15   satisfied.    It reasoned that:      (i) a Clarifying Order of the

16   required breadth had been entered in 2004, see id. at 613-14;

17   (ii) the Order became a “Final Order” when “it was affirmed by

18   the Supreme Court, the court of last resort, in Bailey on June
19   18, 2009,” id. at 614; and, (iii) even after Manville IV’s
20   holding that Chubb was not bound by the injunctions due to its

21   lack of notice, the Order enjoined the bargained-for breadth of

22   claims, id.    It explicitly noted for the record that satisfaction

23   of the release/dismissal conditions precedent was not disputed by

           6
             Travelers filed petitions for writs of certiorari and mandamus with
     the Supreme Court, and the petitions were denied on November 29, 2010. See
     Travelers Indem. Co. v. Chubb Indem. Ins. Co., 131 S. Ct. 644 (2010).

                                           13
 1   Travelers.   Id. at 608.   The bankruptcy court directed Travelers

 2   to fulfill its payment obligations immediately.     Id. at 615.

 3        Proceedings regarding the propriety and amount, if any, of

 4   prejudgment interest then began.      Travelers sought to broaden the

 5   issues by claiming, for the first time, that the Agreements’

 6   conditions precedent regarding disposal of the Direct Actions had

 7   not been met.   The bankruptcy court rejected this attempt on the

 8   ground that Travelers had not asserted this issue in response to

 9   the motion to compel.   A final judgment was subsequently issued

10   against Travelers requiring it to pay over more than $500 million

11   (more than $65 million of which was prejudgment interest).

12        The district court reversed on February 29, 2012, holding

13   that the disputed conditions precedent had not been satisfied

14   because (i) the breadth of the language represented in each
15   Agreement’s Exhibit A had been narrowed by this court’s Manville
16   IV decision; and (ii) the Clarifying Order never became a “Final

17   Order” as defined in the Agreements.      In re Johns-Manville Corp.

18   (Manville VI), 845 F. Supp. 2d 584, 592-96 (S.D.N.Y. 2012).       The

19   district court therefore did not determine whether other

20   conditions precedent under the Agreements had been satisfied, nor

21   did it rule on matters pertaining to the bankruptcy court’s award

22   of prejudgment interest.   This appeal followed.

23                                DISCUSSION

24        We review a bankruptcy court’s decision that has

25   subsequently been appealed to the district court “independently.”
26   In re Baker, 604 F.3d 727, 729 (2d Cir. 2010).      In doing so, we

                                      14
 1   accept the bankruptcy court’s “factual findings unless clearly

 2   erroneous but review[] its conclusions of law de novo.”          Id.

 3   a)   Contested Conditions Precedent

 4         The interpretation of unambiguous settlement-agreement terms

 5   is a question of law subject to de novo review.      See Tourangeau

 6   v. Uniroyal, Inc., 101 F.3d 300, 307 (2d Cir. 1996).       The

 7   Agreements here are “governed by and construed in accordance with

 8   the laws of the State of New York.”     App. at 239, 276, 312.

 9   Under New York law, “a written agreement that is complete, clear

10   and unambiguous on its face must be enforced according to the
11   plain meaning of its terms.”   Greenfield v. Philles Records,
12   Inc., 98 N.Y.2d 562, 569 (2002).      New York law also requires

13   strict compliance with settlement agreements, which are binding

14   and enforceable contracts between parties.     IDT Corp. v. Tyco

15   Grp., S.A.R.L., 13 N.Y.3d 209, 213-14 (2009).      Further,

16   “[e]xpress conditions must be literally performed; substantial

17   performance will not suffice.”   MHR Capital Partners LP v.

18   Presstek, Inc., 12 N.Y.3d 640, 645 (2009).

19         1) Breadth and Finality of the Clarifying Order
20         The parties primarily contest whether:     (i) the breadth of

21   the bankruptcy court’s Clarifying Order met the breadth

22   requirement in Exhibit A of the Agreements; and (ii) the

23   Clarifying Order became “final” within the definition of the

24   Agreements.   These questions, of course, govern whether the

25   conditions precedent to Travelers’ obligation to pay have been

26   satisfied.    We conclude that they have been satisfied.

                                      15
 1             A) Breadth

 2          Under both the Statutory and Hawaii Direct Action

 3   Settlement Agreements, the relevant condition precedent requires

 4   entry of “a Clarifying Order containing prohibitions against

 5   Claims at least as broad as those contained in Exhibit A . . . .”
6 Ohio App. at 231, 269.    Similarly, under the Common Law Direct Action

 7   Agreement, the relevant condition precedent requires the “[e]ntry

 8   of an order or orders of the Bankruptcy Court, issued pursuant to

 9   the [1986 Orders] . . . substantially in the form attached hereto
10   as Exhibit A . . . .”   Id. at 307.
11        We begin by observing that the injunctive language found in

12   each Agreement’s appended Exhibit A was included, nearly

13   verbatim, in the Clarifying Order.    Travelers concedes as much.

14   But Travelers argues, and the district court agreed, that this

15   court’s holding in Manville IV diminished the reach of the

16   Clarifying Order because the order became “jurisdictionally void”

17   as to Chubb, 600 F.3d at 158, which failed to receive

18   constitutionally sufficient notice of the 1986 Orders.    Travelers

19   asserts that, consequently, the Clarifying Order does not

20   “contain[] prohibitions against Claims at least as broad as those

21   in Exhibit A,” because Chubb could potentially bring a claim

22   against Travelers.   Brief for Appellees at 40-41 (internal

23   quotation marks omitted).   We disagree.

24        The Clarifying Order’s injunctive language was affirmed in

25   Bailey and has not been altered since.     In Bailey, the Supreme

26   Court determined that the bankruptcy court had, in substance,

                                      16
 1   properly interpreted the 1986 Orders in the Clarifying Order with

 2   respect to the new, nonderivative Direct Actions:     “The

 3   Bankruptcy Court correctly understood that the Direct Actions

 4   fall within the scope of the 1986 Orders . . . .” 557 U.S. at

 5   148.   The injunction that Bailey approved, therefore, bars not

 6   only those traditional direct-action claims that sought redress

 7   from Travelers based on Manville’s own wrongdoing, but also those

 8   nonderivative claims against nondebtor Travelers that were the

 9   subject of the 2002-2004 settlement negotiations.     The Clarifying

10   Order, as a restatement of the 1986 Orders’ injunction, precludes

11   claimants who have brought any Direct Actions -- or related

12   indemnity or contribution claims -- from further prosecution of
13   those claims against Travelers.    Id. at 149-50; Manville VI, 845
14 F. Supp. 2d at 595.

15          Travelers had maintained that the 1986 Orders enjoined the

16   Direct Actions throughout the 2002-2004 settlement negotiations,

17   Manville I, 2004 WL 1876046, at *21 ¶ 93, but its position was

18   not vindicated until Bailey was issued.      Bailey thus affirmed the

19   scope of the injunctive language contained within the Agreements’
20   Exhibit As, and the Clarifying Order bars all such claims -- all

21   it was meant to do.

22          The fact that Chubb may collaterally attack the

23   applicability of the Clarifying Order to actions it might bring

24   -- because it never received constitutionally sufficient notice

25   -- does not alter our conclusion.      The error in Travelers’

26   reading of the Clarifying Order stems from the conflation of two

                                       17
 1   separate issues:   (i) a party’s ability to collaterally attack an

 2   order for lack of constitutional notice; and (ii) the integrity

 3   of that order and the breadth of claims it bars.

 4        Travelers’ reading asks us to adopt an interpretation of the

 5   Clarifying Order that could not reasonably have been intended by

 6   the parties, whatever Travelers’ private hopes and dreams, and is

 7   not supported by the language of the Agreements.   The

 8   interpretation proposed by Travelers would have required the

 9   bankruptcy court either to:    (i) certify that all potential

10   claimants -- all entities and individuals on the planet, from now

11   until the end of time -- have received constitutionally

12   sufficient notice of the 1986 Orders and their relevant

13   proceedings; or (ii) bar all claimants whether or not they had

14   constitutionally sufficient notice.   But neither action could

15   have been intended by sophisticated parties because each would

16   have been well beyond the bankruptcy court’s power.   Undoubtedly,

17   that is the reason why no such requirement is found in the

18   Agreements’ terms or their Exhibit As, whatever Travelers’
19   “secret or subjective intent.”   Klos v. Lotnicze, 133 F.3d 164,
20   168 (2d Cir. 1997).

21        The district court disagreed that Travelers’ position

22   required the bankruptcy court “‘to enter an order clarifying that

23   all Direct Action claims were enjoined . . . regardless of

24   whether the parties . . . received constitutionally sufficient

25   notice of the 1986 Orders.’”   Manville VI, 845 F. Supp. 2d at 593

26   (quoting Manville V, 440 B.R. at 613).    It correctly noted that

                                      18
 1   Travelers is not seeking to enforce an injunction against

 2   claimants in an unconstitutional manner but is asking only for a

 3   recognition that the disputed condition precedent was never

 4   fulfilled.   However, this argument, like the argument rejected

 5   above, proceeds on the erroneous premise that the Agreements

 6   called for a Clarifying Order that bound entities without

 7   constitutionally sufficient notice.     As such, the Agreements, or

 8   the ensuing Clarifying Order, would have been a nullity, and

 9   common canons of contract construction call upon us to reject
10   such an interpretation, see Restatement (Second) of Contracts §
11   203 (1981), which is not a difficult task where, as here, such an

12   interpretation finds no support in the language.

13        Moreover, Travelers’ interpretation amounts to a contractual

14   term that is incapable of ever being fulfilled, because some

15   claimant somewhere on the planet could always appear to attack

16   the order collaterally.   See id. § 76 cmt. b.    Such an impossible

17   condition -- with no support in contractual language and clearly

18   not intended by the parties -- would have rendered the contract a
19   nullity from its inception.   See id.
20        Travelers’ interpretation must be rejected for the

21   additional reason that the parties bargained only for a

22   clarification, not an expansion, of the 1986 Orders, and the

23   jurisdictional reach of those Orders was already at issue at the

24   time of negotiations.   Leaving aside the separate issue,

25   discussed supra, of whether the bankruptcy court could have

26   extended the Orders’ scope, the portions of the Agreements at

                                     19
 1   issue here evidence no intent by the parties that the Clarifying

 2   Order would do so.   Manville IV, therefore, was rooted in an

 3   interpretation of the breadth of the 1986 and Clarifying Orders,

 4   but that breadth had already been determined to be coextensive

 5   with respect to the issues here and could not have been affected

 6   by our decision in that case.

 7        Rooted in the 1986 Orders, the Clarifying Order could bar

 8   claims only by those parties that received constitutionally

 9   sufficient notice of the 1986 Orders and relevant proceedings.

10   As a party to the proceedings leading up to the 1986 Orders,

11   Travelers knew the scope of notice attendant to those

12   proceedings.   For example, Travelers knew that an FCR was

13   appointed by the bankruptcy court to represent the interests of

14   future asbestos claimants, but that no equivalent FCR had been

15   appointed regarding the interests of future indemnity and

16   contribution claimants.

17        To be sure, had Travelers believed that the bankruptcy court
18   exercised in rem as opposed to in personam jurisdiction in
19   entering the 1986 Orders, it might also have believed that the
20   Clarifying Order’s injunction barred Chubb’s attack.    See, e.g.,
21   Manville II, 340 B.R. at 68-69.     Of course, the in personam

22   nature of the jurisdiction exercised by the bankruptcy court in

23   releasing nondebtors from third-party claims demands that any

24   party barred by the 1986 Orders (and by extension, the Clarifying

25   Order) must have received constitutionally sufficient notice

26   accordant with that jurisdiction.

                                       20
 1        But Travelers recognized the possibility of this:    “In its

 2   October 26, 2009 post-argument submission, Travelers argued that

 3   the bankruptcy court’s notice procedures relating to the 1986
 4   Orders were ‘wholly consistent’ with the exercise of ‘both in rem

 5   jurisdiction and in personam jurisdiction over all Chubb

 6   entities.’”    Manville IV, 600 F.3d at 154 n.14.   Travelers also

 7   conceded that the claims underlying the Direct Actions, which

 8   were the subject of the 2002-2004 negotiations, were

 9   “unimaginable” during the proceedings that led to the 1986
10   Orders.   Travelers’ Reply Brief at 5, Manville V (No. 82-11656-
11   brl); App. at 642.

12        Nonetheless, the pertinent portions of the Agreements did

13   not provide for an injunction any greater than that contained

14   within the 1986 Orders, nor did they address issues of notice or

15   due process.   A court “will not imply a term where the

16   circumstances surrounding the formation of the contract indicate

17   that the parties, when the contract was made, must have foreseen

18   the contingency at issue and the agreement can be enforced
19   according to its terms.”   Reiss v. Fin. Performance Corp., 97
20 N.Y.2d 195, 199 (2001).    We decline Travelers’ invitation to look

21   beyond the Agreements’ obvious meaning and to consider Travelers’

22   subjective hopes.

23        We therefore hold the Clarifying Order contains an

24   injunction as broad as, or substantially in the form of, that

25   contained in the Agreements’ Exhibit As.

26

                                      21
 1               B) Finality

 2        We next consider whether the Clarifying Order became final

 3   and unappealable after the Supreme Court’s ruling in Bailey.

 4   Travelers argues here, and the district court concluded, that

 5   when Manville IV “reversed” the district court’s decision “as to

 6   Chubb,” 845 F. Supp. 2d at 594, it rendered the Clarifying Order

 7   not final.   We conclude, as the bankruptcy court did, that the

 8   Clarifying Order became final under the Agreements’ definition

 9   once Bailey was decided by the Supreme Court.

10        As noted, under the Agreements, a “Final Order” is an order

11   from which no appeal is taken or one that has been “affirmed by

12   the highest court to which such order was appealed or certiorari

13   has been denied and the time to take any further appeal or

14   petition for certiorari shall have expired.”    App. at 227-28,

15   265, 304.
16        In reviewing the 2004 Orders, Bailey rejected the
17   jurisdictional challenges brought by Chubb and the other

18   objectors.   It determined that the 1986 Orders, having been final

19   for decades, were no longer subject to challenges to the
20   bankruptcy court’s power to enjoin third-parties from bringing
21   claims that did not affect the res of the bankruptcy estate
22   against nondebtors.   Bailey, 557 U.S. at 152 (“[O]nce the 1986

23   Orders became final on direct review (whether or not proper

24   exercises of bankruptcy court jurisdiction and power), they

25   became res judicata to the parties and those in privity with them

26   . . . .” (internal quotation marks omitted)).   The Court also

                                     22
 1   held, just as this court had in Manville III, that the bankruptcy

 2   court “plainly had [subject matter] jurisdiction to interpret and

 3   enforce its own prior orders.”   Id. at 151.

 4         Therefore, the pertinent portion of the injunction contained

 5   within the Clarifying Order, as an extension of the 1986 Orders,

 6   was similarly not subject to challenges regarding the bankruptcy

 7   court’s subject matter jurisdiction.   Once Bailey determined that

 8   the bankruptcy court had jurisdiction to interpret the scope of

 9   the 1986 Orders, the Clarifying Order became a “Final Order”

10   under the Agreements’ definition.
11         Travelers argues that:   (i) Bailey’s remand to this court,
12   and (ii) this court’s subsequent reversal of the district court

13   in Manville IV, indicate that the Clarifying Order never became

14   final.    Neither argument is persuasive.

15         First, the Supreme Court in Bailey reversed Manville III’s

16   vacatur of the 2004 Orders (for the bankruptcy court’s purported

17   lack of jurisdiction).   This effectively reinstated the 2004

18   Orders, including the Clarifying Order.     The Supreme Court’s

19   remand with respect to Chubb’s due process argument had no
20   bearing on the Clarifying Order’s finality.    The case was

21   remanded for a determination of whether Chubb failed to receive

22   constitutionally sufficient notice of the 1986 Orders and whether

23   Chubb was thus bound by them and the Clarifying Order.    557 U.S.
24   at 155.   That issue was then decided by this court in Manville
25   IV.

                                      23
 1        Second, while Manville IV reversed as to Chubb, it did not

 2   alter any aspect of the Clarifying Order, the meaning of which is

 3   discussed in detail above.   The fact that Chubb is not bound by

 4   the 1986 Orders does not, therefore, render the 1986 Orders any

 5   less “final.”   In sum, neither Bailey nor this court’s holding in

 6   Manville IV deprived the Clarifying Order of finality.

 7        As the Supreme Court recognized, “the 1986 Orders became

 8   final on direct review over two decades ago.” 557 U.S. at 148.

 9   It would defy logic to hold that the Clarifying Order, as an

10   extension of the 1986 Orders, is not “final” simply because Chubb

11   did not receive constitutionally adequate notice of the 1986

12   proceedings.    If the 1986 Orders are final despite the

13   inapplicability of the orders to Chubb, it follows that the

14   Clarifying Order is just as final.

15        Therefore, the Clarifying Order became final, as that term
16   is defined in the Agreements, once Bailey was issued.
17       2) Conditions Precedent Regarding Releases/Dismissals

18        We next consider the Agreements’ conditions precedent that

19   require either the escrowing of a certain number of releases or
20   the dismissal of claims with prejudice.   We hold that Travelers’

21   arguments in that regard are waived.

22        For Travelers’ payment obligation to mature under the Hawaii

23   Direct Action Settlement, plaintiffs must dismiss with prejudice

24   all claims against Travelers.    Under the Common Law Direct Action

25   Settlement Agreement, at least 14,000 general releases must be

                                      24
 1   executed and delivered into escrow before Travelers is required

 2   to pay into the settlement fund.

 3        Travelers argues that these conditions precedent have not

 4   been satisfied.   Appellants assert that Travelers has waived

 5   these arguments by failing to raise them properly before the

 6   bankruptcy court in its papers in opposition to appellants’

 7   motions to compel.

 8        The motions to compel by their very nature, and explicitly

 9   to boot, put the various issues regarding satisfaction of the

10   conditions precedent in play.   Travelers’ opposition to the

11   motions recognized this by claiming that the conditions precedent

12   regarding the breadth and finality of the Clarifying Order were

13   not satisfied.    As a result, the bankruptcy court understood, and

14   noted explicitly, that Travelers raised no objection regarding

15   the release/dismissal conditions precedent.   It stated:

16             Pursuant to the Settlements, Travelers’
17             payment obligations are contingent upon the
18             satisfaction of three conditions precedent.
19             These conditions, stated in general terms,
20             are as follows: (a) entry of an order by
21             this Court that becomes a “Final Order”
22             clarifying that the Direct Actions were, and
23             had always been, barred by this Court’s
24             injunction contained in the 1986
25             Orders . . .; (b) entry of an order, that
26             becomes a “Final Order” approving the
27             proposed Settlements; and (c) the execution
28             and delivery into escrow of a specified
29             number of General Releases . . . . None of
30             the Parties disputes that conditions (b) and
31             (c) have been satisfied.
32
33   Manville V, 440 B.R. at 608 (footnote omitted).

                                      25
 1        Once the bankruptcy court determined that the Clarifying

 2   Order met the breadth and finality requirements, it ordered

 3   briefing and held oral argument regarding the issue of whether

 4   plaintiffs were entitled to interest on the settlement proceeds

 5   based on Travelers’ breach.   Id. at 615.   The arguments that

 6   Travelers sought to raise were that the motions to compel lacked

 7   adequate supporting evidence that the release/dismissal

 8   conditions had been met.

 9        The bankruptcy court did not rule on the merits of those

10   arguments.   At the oral argument, the bankruptcy court noted

11   Travelers’ earlier concession that certain conditions precedent

12   had been satisfied:   “If I recall back in all of the Sturm [and]

13   Drang here, we had conditions which we’ll label A, B and C.      And

14   I think Travelers certainly conceded that B and C were met and

15   claimed that A was not met.   I opined otherwise.   And that’s

16   where we stand.”   App. at 857.

17        On appeal to the district court, Travelers argued again that

18   the release/dismissal conditions had not been satisfied.      The

19   district court did not reach these arguments, having found that

20   the conditions precedent regarding scope and finality had not
21   been fulfilled.    See Manville VI, 845 F. Supp. 2d at 596.
22        These arguments were available to Travelers in the

23   bankruptcy court, and Travelers has not offered any reason for

24   its failure to raise these issues in a timely manner in that

25   court.   Although we have discretion to consider a waived argument

26   where necessary to avoid manifest injustice, “the circumstances

                                       26
 1   normally do not militate in favor of an exercise of discretion to

 2   address . . . new arguments on appeal where those arguments were

 3   available to the [parties] below and they proffer no reason for
 4   their failure to raise the arguments below.”   In re Nortel

 5   Networks Corp. Sec. Litig., 539 F.3d 129, 133 (2d Cir. 2008)

 6   (internal quotation marks omitted).

 7         In its brief on appeal, Travelers notes only that it raised

 8   these issues in the district court and does not claim to have

 9   raised them in its opposition in the bankruptcy court to the

10   motions to compel.   In opposing those motions, Travelers argued

11   to the bankruptcy court only that the condition precedent

12   regarding breadth and finality called for denial of the motions.

13   Clearly, a failure to satisfy other conditions precedent should

14   have been raised at that time.   Instead, Travelers, which has had

15   the benefit of competent, imaginative, and meticulous counsel,

16   waited until the bankruptcy court disposed of the arguments

17   before it on the motions to compel and turned to the prejudgment

18   interest question.   Under these circumstances, we see no reason

19   to exercise our discretion to entertain Travelers’ untimely

20   arguments.    We, therefore, consider these arguments waived.
21   c)   Calculation of Prejudgment Interest
22         Finally, we consider whether the bankruptcy court’s award of

23   prejudgment interest was appropriate and, if so, whether the

24   court erred in determining the date from which the award was

25   calculated.

                                      27
 1        Travelers argues that the award is inappropriate because the

 2   Agreements do not include an express provision regarding

 3   prejudgment interest.    Under New York law, however, the

 4   beneficiaries of the settlements are entitled to statutorily

 5   prescribed interest:    “Interest shall be recovered upon a sum

 6   awarded because of a breach of performance of a contract . . . .”

 7   N.Y. C.P.L.R. 5001(a).   We therefore hold that the bankruptcy

 8   court did not err in its decision to award such interest.

 9        Travelers argues further that the bankruptcy court erred in

10   determining the date interest began to accrue.    A court’s

11   decision to award prejudgment interest running from a date
12   certain is a question of fact, see Ginett v. Computer Task Grp.,
13   Inc., 962 F.2d 1085, 1101 (2d Cir. 1992), subject to reversal

14   only if clearly erroneous.   Interest accrues “from the earliest

15   ascertainable date the cause of action existed.”    N.Y. C.P.L.R.

16   5001(b).   The bankruptcy court correctly found that Travelers’

17   payment obligations have been “due and owing since June 18,

18   2009,” when the Supreme Court upheld the Clarifying Order in
19   Bailey.    Manville V,440 B.R. at 615.

20        Travelers asserts that no “Final Order” as defined by the

21   Agreements could have existed until the proceedings were

22   concluded, which, according to Travelers, was November 29, 2010,

23   when the Supreme Court denied Travelers’ petitions for certiorari

24   and mandamus with respect to Manville IV.     This argument assumes

25   incorrectly that Chubb’s due process claim had any bearing on the

26   finality of the Clarifying Order.     As discussed above, however,

                                      28
1   that is not the case.   The bankruptcy court did not err in its

2   assessment of prejudgment interest.

3                               CONCLUSION

4      We have considered appellees’ remaining arguments and find

5   them to be without merit.   For the foregoing reasons, the order

6   of the district court is vacated, and we remand with instructions

7   to reinstate the order of the bankruptcy court.

8

                                    29