Although Section 1109(b) appears to grant a broad right to all parties in interest to participate in the case, and arguably eliminates the requirement to demonstrate prudential standing, it has not been read so broadly. Section 1109(b) has been interpreted to mean that anyone who has a legally protected interest that could be affected by a bankruptcy proceeding is entitled to assert that interest with respect to any issue to which it pertains. A party in interest must still satisfy the general requirements of the standing doctrine.

Although a party in interest may object to confirmation of a plan, it cannot challenge portions of the plan that do not affect its direct interests. A party in interest cannot assert third party rights defensively to defeat confirmation even if confirmation would directly and adversely affect its own rights. Instead, the objecting party can only challenge the parts of the plan that directly implicate its own rights and interests.

These rules limit the standing of insurers to object to confirmation of a debtor's plan which deals with asbestos claims. Insurers can object to a provision of the plan that would assign the debtor's policy rights, and to trust distribution procedures as they affect the debtor/insured's duty to cooperate with the insurers. Insurers cannot, however, object to the plan based on how it affects the rights of third parties, even if those objections may provide grounds to defeat confirmation. These objections include issues relating to classification, treatment, solicitation and voting.