A case issued on August 15th by the Third Circuit Court of Appeals addresses the thorny legal matter of substantive consolidation. Recall that there are two kinds of consolidation in chapter 11 cases: administrative and substantive. Both types are efforts to address situations which arise when there are filings by more that one related debtor. The former is procedural and common, allowing single filings in the lowest numbered case extended in the other cases. Exceptions exist, for example, for proofs of claim which still must be filed in the specific debtor's case where the claim arose and as to the filing of certain adversary proceedings. The latter is substantive and moderately rare. It has sweeping legal implications as substantive consolidation basically takes each debtor's separate pot of money and debts and brings them together into a consolidated pot. The result being that some creditors get a windfall (because with consolidation their claim receives a higher payout) and some get paid less than they otherwise would (again because the single debtor which holds their claim had more money for distributions than does the pot for all debtors collectively). In the Owens Corning opinion, the Third Circuit overturned the District Court which had allowed the substantive consolidation of several debtor entities. The Court held that "from this we conclude that the proponents of substantive consolidation request it not to rectify the seldom-seen situations that call for this last-resort remedy but rather as a ploy to deprive one group of creditors of their rights while providing a windfall to other creditors." Here is a link to the full case: http://www.ca3.uscourts.gov/opinarch/044080p.pdf Mike