Insolvency, Restructuring and Run-Off

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In the light of the Lehman collapse, the FSA has been taking steps to improve client asset protection. On 20 October 2010 it published a policy statement giving details of some changes to the client assets regime which would take effect on a variety of dates in 2011. …
Read More UK: FSA Enhances Client Asset Protection

Following creditors’ meetings at the end of April 2010, the English High Court sanctioned the English and American Underwriting (EAUA) pools solvent scheme on 6 October 2010. By the time of the court hearing, the scheme, which consists of sixteen reinsurers, thirteen solvent and three insolvent, the scheme was unopposed. …
Read More UK: English and American Pool Scheme Sanctioned

HM Treasury has issued a consultation paper on proposals for a special administration regime for investment banks which it hopes will lead to less disruption in financial markets and simplify the process of returning assets and money to clients and creditors of a failing bank. …
Read More UK: Proposed Special Administration Regime For Investment Banks

In Omega Proteins Limited v Aspen Insurance UK Ltd [2010] EWHC 220 (Comm) the High Court was asked to consider whether a judgment that an insured was liable for breach of contract prevented a court from finding tortious liability within the same cover. …
Read More UK: A Finding of Contractual Liability does not Prevent a Finding of Tortious Liability

It is reported in the press that the PWC administrators of Lehman Brothers International (Europe) Limited (LBIE), the London-based arm of the Lehman bank, are to appeal the recent Court of Appeal ruling relating to the distribution of segregated client funds. The first instance judge held that those clients of LBIE whose funds should have been segregated, but were not, were not entitled to share in the pot of client money. …
Read More UK: Lehman English Administrators to Appeal Court of Appeal Ruling

In Lehman Brothers International (Europe)(in administration) v CRC Credit Fund Limited & Ors [2010] EWCA Civ 917 the Court of Appeal considered the first instance judgment of Mr Justice Briggs on the operation of the Client Money Rules (CASS) in relation to the insolvency of Lehman Brothers International (Europe)(LBIE). We have previously reported on the judgment of Briggs J here and here. …
Read More UK: Court of Appeal Reverses Key Aspects of High Court Judgment on the Treatment of Client Money in the Lehman Insolvency

We have previously reported here and here on the long-running saga following the demise of Equitable Life. The latest chapter is the Equitable Life (Payments) Bill which received its first reading in the House of Commons on 22 July 2010.  The Bill is intended to allow the Treasury to provide finance for payments to be made in cases where persons have been adversely affected by the Government’s maladministration in the regulation of Equitable Life Assurance Society (Equitable Life) in the period before 1 December 2001. …
Read More UK: Equitable Life (Payments) Bill Receives First Reading in House of Commons

In Justin Mayhew v (1) Philip King (2) Milbank Trucks Ltd (Defendants) & Chaucer Insurance plc (Third Party and Part 20 Claimant) v Towergate Stafford Knight Company Limited & Ors Sir Edward Evans-Lombe held that a term of a settlement agreement which stated that a right to an indemnity would cease if the party with the benefit of the indemnity went into administration was contrary to the anti-deprivation principle and would be struck out. …
Read More UK: High Court confirms operation of the anti-deprivation principle