Topic: Insolvency, Restructuring and Run-Off

UK: JK Buckenham Ltd Scheme of Arrangement

Edwards Wildman have been instructed to act for J.K. Buckenham Limited (the Company) in relation to a scheme of arrangement which is the first of its kind (the Scheme). Under the Scheme, the Company will ask scheme creditors to give up their contractual rights against the Company, which has been in run off since 2007, in return for a replacement contract with its sister company, Howden Insurance Brokers Limited (HIBL). 

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UK: English High Court Authorises Partition of Trust Fund in Scheme of Arrangement

In an uncontested application in English & American Insurance Company Limited, [2013] EWHC 3360 (Ch) the High Court has confirmed that section 57 of the Trustee Act 1925 (the Act) can be used by trustees to partition a trust fund in order to allow trustees to pay one class of beneficiaries without disadvantaging a smaller class of beneficiaries. 

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UK: Part VII Transfers: Proactive, Judgment Led, Intrusive Regulation – the Beginning of a Trend?

On 16 March 2012, Mr Justice Morgan handed down his judgment on an application for directions on the Part VII transfer of the UK insurance business of the Combined Insurance Company of America (CICA) to ACE European Group Limited (AEG) and ACE Europe Life Limited (AEL) (click here for a copy of the judgment). 

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UK: Supreme Court Decision on the Lehman Credit Default Swap “Flip” Provisions

The litigation in England concerning the validity of the “flip” provisions in the Lehman credit default swap transactions, under which the priority changed from swap counterparty (ie Lehman) priority to noteholder priority on the insolvency of the Lehman entities (litigation which began under the title Perpetual Trustee Company Limited v BNY Corporate Trustee Services Limited), has finally come to an end with a Supreme Court decision under the title Belmont Park Investment PTY Limited v BNY Corporate Trustees Services Limited and Lehman Brothers Special Financing Inc (2011 UKSC 38). 

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UK: High Court Tells Lehman Administrators to Await Supreme Court Decision

Following the Court of Appeal decision in their application to the Court for directions to enable them to identify client money and its traceable proceeds (as previously reported here), the administrators of Lehman Brothers International (Europe) sought further directions regarding the further work to be carried out, the evidence to be prepared and the identification of appropriate respondents and sought a protective costs order. 

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Rhode Island Statute Allowing for the Commutation of a Solvent Insurer’s Run-Off Business Held Constitutional

On April 25, 2011, the Rhode Island Superior Court (Silverstein, J.) ruled in favor of the constitutionality of the Voluntary Restructuring of Solvent Insurers Act (the “Restructuring Act”), a state statute enacted in 2002 that allows Rhode Island domestic commercial insurers and reinsurers (including those that redomesticate to Rhode Island) to enter into a commutation plan for their run-off business.  Under such a plan, the insurer/reinsurer agrees to pay policyholders/cedents the estimated value of their claims as of a set date in exchange for extinguishing the right to make any future claims. 

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