Applying Minnesota law, a federal district court has held that, where an entity’s principal shareholder was insolvent, but the entity was not, the individual’s insolvency could not be attributed to the entity for purposes of establishing Side A coverage for “Non-Indemnifiable Loss.” Zayed v. Arch Ins. Co., 2013 WL 1183952 (D. Minn. Mar. 20, 2013). The court further held that allegations of fraudulent inducement did not trigger an exclusion for claims “arising from” contractual liability, but that the claim was uninsurable as matter of law.
The United States District Court for the District of Connecticut has held that a settlement agreement between the claimant and policyholder satisfies Connecticut’s direct action statute’s requirement regarding the need for an unsatisfied judgment. Tucker v. American International Group, Inc., No. 3:09-cv-1499, 2013 WL 1294476 (D. Conn. Mar. 28, 2013). Accordingly, the court permitted the claimant’s suit against the carrier to proceed.
Official committees of unsecured creditors (Committees) serve a vital role in protecting the rights of the general unsecured creditors during a chapter 11 bankruptcy case.
“When a business becomes insolvent, many interests are at risk. Creditors may not be able to recover their debts, investors may lose their investments and employees may lose their jobs. If the business is the sponsor of an employee pension plan, the benefits promised by the plan are not immune from that risk. The circumstances leading to these appeals show how that risk can materialize. Pension plans and creditors find themselves in a zero-sum game with not enough money to go around.
On Friday, February 1, 2013, the Supreme Court of Canada released its highly anticipated decision in Indalex Limited (Re). The ruling stemmed from an appeal of an Ontario Court of Appeal decision that had created commercial uncertainty for financing transactions. The primary issue for lenders was a priority dispute between a court ordered super-priority charge granted to a lender that had provided “debtor-in-possession” (DIP) financing under the Compan
The Supreme Court of Canada released its highly anticipated decision in Indalex Limited (Re) this morning. The ruling stemmed from an appeal of an Ontario Court of Appeal decision that had created commercial uncertainty among many participants in the financial services, pensions and restructuring industries.
The United States Bankruptcy Court for the Eastern District of New York held that it had subject matter jurisdiction over a bankruptcy trustee’s adversary proceeding against the bankrupt entity’s insurer because the policy and policy proceeds were part of the policyholder’s bankruptcy estate. EMS Financial Services, LLC. v. Federal Ins. Co., 2013 WL 64755 (Bankr. E.D.N.Y. Jan. 4, 2013).
Applying California law, a California appellate court has held, in an unpublished opinion, that a judgment for reimbursement against an insured law firm was properly amended to name the sole equity partner of that law firm in light of his “pervasive” involvement in the underlying litigation and coverage litigation and his direction of such litigation in light of the fact that he knew the law firm was dissolved and had no assets. Carolina Cas. Ins. Co. v. L.M. Ross Law Group LLP, 2012 WL 6555545 (Cal. Ct. App. Dec. 17, 2012).
This is another post-Indalex pension deficit priority case. Due to factual differences from Indalex, however, the pension claims were largely rejected.
The United States District Court for the Eastern District of California, applying California law, has concluded that it should exercise jurisdiction under the federal Declaratory Judgment Act to determine the availability of coverage for a written demand and has held that the related coverage action should not be stayed in favor of potential future underlying litigation between the Federal Deposition Insurance Corporation (FDIC) and the insureds because the outcome of the coverage litigation would not be dependent on resolution of disputed facts in such a future action. Progressiv