On February 8, 2012, the Pennsylvania Insurance Department (the “Department”) announced that the Pennsylvania Commonwealth Court approved its petition to liquidate First Sealord Surety Insurance.
According to the Department's Commissioner, Michael Consedine, the Department petitioned the Commonwealth Court for a liquidation order because “First Sealord Surety is no longer able to meet its policyholder obligations or pay its debts as they come due.”
The U.S. District Court for the Southern District of New York recently issued a decision that will significantly limit the chances of success for many claims that the trustee of the Bernard L. Madoff Investment Securities (“BLMIS”) estate, Irving Picard, has brought against former investors in BLMIS to recover funds for the estate. In Picard v. Katz, 11 Civ. 3605 (S.D.N.Y.), District Judge Jed S. Rakoff issued a decision that dismissed most of the causes of action brought against a group of investors under the U.S.
Department of Community and Economic Development (DCED) Secretary C. Alan Walker filed a petition with the Commonwealth Court to appoint David Unkovic as the receiver for the financially distressed state capital, Harrisburg.
The city’s failure to come to an agreement on an acceptable recovery plan has forced the commonwealth to take this action,‖ Governor Tom Corbett said in a statement. ―As more time goes by without action, the city’s financial situation continues to get worse.‖
An article by the National Underwriter Company discusses a recent Moody’s report that asbestos claims are again on the rise after years of declining or flat claims.1 This has led several insurers to increase their asbestos reserves and Moody’s views this trend as a warning flag for the property and casualty insurance industry as a whole.
Governor Corbett is almost certain to sign legislation that places a Receiver in charge of Harrisburg‟s finances after the House agreed to Senate changes and sent the bill to the Governor‟s desk.
The General Assembly acted despite a recent move by Harrisburg City Council to file for bankruptcy. The architects of the Harrisburg „Receiver‟ plan, State Rep. Glen Grell, R-Cumberland and State Senator Jeff Piccola, R-Dauphin, both maintain that the bankruptcy move was illegal.
In the recent case of Whittle Development, Inc. v. Branch Banking & Trust Co. (In re Whittle Development, Inc.), No. 10-37084, 2011 WL 3268398 (N.D. Tex. July 27, 2011), a bankruptcy court was asked whether a preference action could be sustained against a creditor who purchased real property in a properly conducted state law foreclosure sale. Recognizing a split of authority and some contrary principles enunciated by the Supreme Court in its prior decision, BFP v. Resolution Trust Corp., 511 U.S. 531 (1994), the bankruptcy court found that a preference claim could be asserted.
On June 23, 2011, the Supreme Court of the United States issued the decision of Stern v. Marshall, debatably the most important case on bankruptcy court jurisdiction in the last 30 years. The 5-4 decision, written by Chief Justice Roberts, established limits on the power of bankruptcy courts to enter final judgments on certain state law created causes of action.
A measure that places a Receiver in charge of Harrisburg’s finances is expected to be approved by the Senate on October 17, despite the recent move by City Council to file for bankruptcy.
“From our point of view nothing has changed,” said State Rep. Glen Grell, R-Cumberland, who worked on the Receiver legislation with State Senator Jeff Piccola, R-Dauphin. “The bankruptcy move is specifically forbidden under legislation we passed in June. I don’t think there’s any doubt it will be challenged and pretty quickly dismissed.”
Borders has long collected personal information from customers and promised that such information would not be disclosed without consent. In light of that and Borders' current bankruptcy proceedings, the FTC has sent a letter to the consumer privacy ombudsman overseeing the Borders bankruptcy that seeks the protection of customer personal information.
The U.S. Court of Appeals for the Second Circuit recently held that prematurity redemptions of commercial paper made by Enron Corp. shortly before it filed for bankruptcy were protected from avoidance by 11 U.S.C. § 546(e)’s safe harbor for securities transaction settlement payments. In re Enron Creditors Recovery Corp. v. Alfa., No. 09-5122-bk (2d Cir. June 28, 2011). In so doing, the Second Circuit resolved a clash between the Bankruptcy Code’s interest in avoiding preferential debt repayment and the securities industry’s interest in preserving transaction finality.