Insolvency, Restructuring and Run-Off

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Cases on the anti-deprivation rule are coming with increasing frequency. In the latest case, reported as Folgate London Market Limited (formerly Towergate Stafford Knight Co Limited) v Chaucer Insurance PLC [2011] EWCA Civ 328, an insurance broker had agreed to indemnify a company against liability in respect of a personal injury claim where the insurers had declined cover on the basis of an exception in the policy. …
Read More UK: English Court of Appeal decision on the Anti-deprivation Rule

In BNY Corporate Trustee Services Limited v Eurosail–UK 2007–3BL Plc and others, the Court of Appeal ruled on the interpretation of the so-called “balance-sheet” test of insolvency under section 123(2) of the Insolvency Act 1986. This is essentially that a company is deemed unable to pay its debts if the value of its assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities. …
Read More UK: Court of Appeal Case on the “Balance-Sheet” Test of Insolvency

A New York appeals court recently dismissed one of two lawsuits filed against MBIA Inc. (“MBIA”) by more than a dozen major financial institutions concerning the bond insurer’s financial restructuring.  The plaintiffs – owners of insurance policies issued by MBIA for structured finance products, including residential mortgage-backed securities – claimed that the bond insurer’s split into two units was intended to defraud policyholders. …
Read More New York Appeals Court Dismisses Suit Against MBIA Inc. Over Bond Insurer’s Financial Restructuring

The High Court has given another lengthy ruling on issues arising in the administration of Lehman Brothers International (Europe) (LBIE). This ruling addressed general principles on the issue of title to securities (equities and fixed income securities) held by LBIE for affiliates in unsegregated house depot accounts at the point of collapse. …
Read More UK: Lehman Ruling on Title to Securities Acquired for Affiliates

As previously discussed here, Ambac Financial Group Inc. has filed for bankruptcy for Chapter 11 bankruptcy relief with United States Bankruptcy Court for the Southern District of New York. …
Read More Ambac and IRS Come to Temporary Terms Regarding Dispute Over $700 Million in Tax Refunds

As we first covered here, Ambac Financial Group Inc., the parent of the ailing Wisconsin-domiciled bond insurer Ambac Assurance Corp., filed for Chapter 11 bankruptcy relief with United States Bankruptcy Court for the Southern District of New York on November 8, 2010.  Ambac’s troubles began when the mortgage-backed securities market collapsed in late 2008, causing a cascade of claims on policies issued by the bond insurer to protect creditors in the event of a default by borrowers. …
Read More During Hearing to Consider Ambac’s Rehabilitation Plan, Insurance Regulator Reveals that Liquidation of the Bond Insurer was Considered

The New York Law Journal published an article titled “Foreclosure Crisis: Intramural Battles May be the Toughest Part,” which was authored by Mark Peters, a partner in the Firm’s New York office. …
Read More Foreclosure Crisis: Intramural Battles May be the Toughest Part

In another instalment of the Scottish Lion saga (see our previous blog entries here, here and here) the Outer House of the Court of Session (the Scottish First Instance Court) has ruled that where a scheme creditor submits documents in support of his claim for voting purposes at the creditors’ meeting convened to approve a scheme of arrangement, he is deemed to have waived any privilege there might have been in such documents. …
Read More UK: Scottish Lion – Waiver of Privilege by Creditor Participating in Scheme of Arrangement

Ambac Financial Group Inc., parent of the troubled Wisconsin-domiciled bond insurer Ambac Assurance Corp., filed for Chapter 11 bankruptcy relief on November 8, 2010.  As was alluded to in our blog post last week, Ambac has been unable to raise additional capital or come to terms with its debt holders.  Additionally, while Ambac had originally sought to enter bankruptcy as part of a prepackaged agreement, this too failed. …
Read More Ambac Financial Group, Inc. Files for Chapter 11 Bankruptcy