The Scottish Court of Session Decisions has nixed a scheme of arrangement under the UK Companies Act of 2006, stating it could not be judicially sanctioned without the assent of all creditors. A scheme of arrangement is a reorganization device in which, with the approval of at least three-quarters of a company’s creditors, the company may compromise the claims of all its creditors. A somewhat analogous device might be a “cram-down” under U.S. bankruptcy law, with the important distinction that a scheme of arrangement may be used even by a solvent company.

Reliance Insurance Company, which had consented to the entry of an Order of Rehabilitation by the Commonwealth Court of Pennsylvania on May 29, 2001, and which was ordered by the court into liquidation on October 3, 2001, reached a Commutation, Settlement Agreement, and Release with its reinsurer, Munich Reinsurance America. The Settlement Agreement is dated December 29, 2008.

Century Indemnity Company (“CIC”) reinsured The Home Insurance Company (“Home”). Due to Home’s liquidation proceedings, which began in 2003, CIC became fully liable for a $13 million settlement of certain environmental claims for which CIC and Home were both primarily liable under the parties’ respective insurance contracts. CIC, a debtor in the Home proceedings, sought a setoff of $8 million against other obligations owed to Home, for Home’s share of the settlement that CIC paid in full. The New Hampshire Supreme Court reversed the trial court’s order permitting the setoff.

As previously reported (3/17/08 post), this case involves the interpretation of the terms of a reinsurance contract and the duties of the parties under that contract. In the most recent development, the Eighth Circuit affirmed the Bankruptcy Appellate Panel’s judgment affirming in part, and reversing in part, a prior decision of the bankruptcy court regarding the reinsurance contract at issue.

We have previously reported on the procedurally tortured case between the New York Insurance Department, as liquidator of Nassau Insurance Company, and Jeanne Di Loreto to recover assets contended to have been diverted from Nassau. In the latest salvo, defendants New York Insurance Department, William Costigan, and Eric DiNallo, Mark Peters and Andrew Lorin separately moved to dismiss plaintiff Di Loreto’s Complaints seeking to prevent execution of a judgment obtained against her by the New York Liquidation Bureau.

Hudson, the Superintendent of the Ohio Department of Insurance, in her capacity as Rehabilitator of Colonial Insurance Company (“Colonial”), brought an application for an order, which was subsequently granted, terminating the rehabilitation proceeding of Colonial, authorizing the transfer of funds to the Ohio Department of Commerce, discharging and releasing the Rehabilitator, authorizing the final accounting, authorizing the closing of the estate and the dissolving of the corporate entity, approving the destruction of certain books and records, approving abandonment of physical assets, aut

For the first time, individuals filing for bankruptcy protection may soon be able to reduce principal and interest on home mortgage obligations and prevent enforcement of certain mortgages even after entry of a foreclosure judgment.

The “Ades” and “Berg” groups of investors (the “Ades Berg Group”), were parties who joined in the bankruptcy proceedings of the Bennett Funding Group, Inc. and related companies (the “Bennett Group”), based on claims that, among other things, the Bennett Group had defrauded them in an investment scheme. The Bennett Group was insured under a reinsurance contract issued by Sphere Drake Insurance PLC (“Sphere Drake”). A settlement was reached in the course of the bankruptcy proceedings between some groups of investors and Sphere Drake.

In a July 12, 2007 post, we reported on issues relating to HIH Casualty and General Insurance Limited (“HIH”). The question before the court was whether it had jurisdiction to entertain a request under the Insolvency Act for directions to the liquidators in England to transfer assets collected by them to the liquidators in an Australian liquidation. The Court of Appeal held that it would not direct a transfer of the English assets by the English provisional liquidators to the Australian liquidators because to do so would prejudice the interests of many of the creditors.

We previously posted on March 17, 2008 about a bankruptcy judgment in favor of a reinsured, Acceptance Insurance Companies, Inc. (“Acceptance”), which sought to be excused from the payment of $9 million in premium owed to its reinsurer for the remaining term of a five year contract because it had ceased writing the underlying crop insurance which was the subject of the reinsurance contract.