Insolvency, Restructuring and Run-Off

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In an effort to aggressively counter the recent market crisis, the United States Securities & Exchange Commission and United Kingdom’s Financial Services Authority announced today that they have temporarily banned all short-selling in financial companies. …
Read More BREAKING NEWS: SEC AND FSA Ban Short-Selling in Financial Companies

Lehman Brothers Holdings Inc., the holding company for the fourth-largest United States investment bank, filed for protection under Chapter 11 of the United States Bankruptcy Code on September 15, 2008, marking the largest US bankruptcy filing in history.  Following the filing in the Southern District of New York, the directors of Lehman Brothers International (Europe) and three of its UK subsidiaries applied for administration (a process similar to Chapter 11) in the UK. 

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Read More EAPD Issues Advisory Regarding Insolvency Proceedings in the US, UK and Japan

In the wake of American International Group, Inc.’s (“AIG”) request for a $40 billion bridge loan from the Federal Reserve, New York Governor David Patterson has announced that AIG has been granted “special permission to access $20 billion of capital in its subsidiaries to free up liquidity.”  This will enable, in essence, AIG to make a bridge loan to itself. 

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Read More BREAKING NEWS: AIG Receives Special Permission to Access $20 Billion of Subsidiaries’ Capital

In a recent decision of the United States Bankruptcy Court for the District of Delaware, Jeld-Wen, Inc. v. Van Brunt, Adv. Proc. No. 07-51602 (Bankr. D. Del. June 9, 2008), the court held that a claim for injury allegedly due to exposure to asbestos was not discharged, survived the company’s exit from Chapter 11, and could be asserted against the successor company in a State court action under the circumstances presented: (i) under applicable governing non-bankruptcy law, such a claim does not arise until  injury manifests; (ii) the injury was not discovered until after the company had emerged from bankruptcy; (iii) the company’s confirmed plan of reorganization did not include a channeling injunction accommodating future asbestos related claims; and (iv) the published notice of the plan of reorganization did not provide notice to potential future asbestos claimants that their claims would be discharged by confirmation of the plan. …
Read More Bankruptcy Court Rules That Asbestos Claims Were Not Discharged By Plan of Reorganization

The English High Court provided directions to the liquidators of Whiteley Insurance Consultants (WIC), an insurance intermediary, on how to deal with claims in the liquidation made by creditors to whom insurance policies had been sold by WIC in circumstances where either WIC had no authority from the insurers to place the policies or the insurers did not exist. …
Read More UK: Guidance on the remedies under FSMA – In the matter of Whiteley Insurance Consultants (2008)

On July 23, 2008, the California Insurance Department announced that it had recovered $56.25 million from Continental Casualty Co. (“Continental”) in connection with a surety bond issued by Continental that guaranteed the obligations of Superior National Insurance Company (“Superior”), a workers’ compensation insurer that was liquidated in 2000. …
Read More Continental Casualty Co. Pays California Guarantee Association $56 Million

In a recent decision of the United States Bankruptcy Court for the District of Delaware, In re Federal Mogul Global, Inc., No. 01-10578 (JKF) (Bankr. D. Del., Mar. 19,  2008) (click here to read the decision), the court ruled that the assignment of rights in certain insurance policies to an asbestos trust was valid and enforceable under the Bankruptcy Code, and anti-assignment provisions in the policies and applicable state law were preempted. …
Read More Bankruptcy Court Rules That Federal Mogul Insurance Policies May Be Assigned to Asbestos Liability Trust

The English Court has ordered that meetings be convened on 4 July 2008 for creditors to vote on the solvent schemes of arrangement being proposed by 82 members of the E W Payne Pools. The E W Payne Pools have been in run-off for over 20 years and, it is predicted, that the run-off could last, if not for the proposed schemes, for at least another 20 years. The purpose of the schemes is to bring that run-off to an early close. …
Read More The E W Payne Pools Scheme