For nearly a year, the Scottish Lion Insurance Company, Limited ( “Scottish Lion”), an insurance company that wrote coverage in the London insurance market, has been litigating with its creditors (policyholders), including many U.S. creditors, to permit it to enter into what is known under U.K. law as a solvent scheme of arrangement. A Scottish appellate court recently ruled in favor of Scottish Lion on a preliminary question of whether such a scheme could be sanctioned under U.K. law despite opposition from a minority of U.S.

At the urging of U.S. policyholders, a Scottish court recently rejected a Scottish insurance company’s efforts to close its books and avoid full liability for long-tail claims when the insurance company is solvent and entirely capable of paying claims.