Where an insured has assigned away its rights to recover available insurance, the insured’s “empty shoes” do not necessarily prevent an excess carrier that pays defense costs rightfully owed by primary carriers from pursuing the primary carriers based a contractual subrogation theory.  An excess carrier proceeding on this basis typically “stands in the shoes of the insured,” obtaining only those rights held by the insured.  Nonetheless, the Fifth Circuit Court of Appeals found last week that where an excess carrier picks up the bill for an insured’s defense, it may recover fr

Introduction
Facts
Decision


Introduction

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.”

In my recent blog posting, I discussed the factors that courts will consider before setting aside an elected condominium board of directors to impose a court-appointed administrator.

Below are some examples where the courts have intervened and appointed an administrator. They include situations where:

On December 1 2011 the Supreme Court of Canada granted leave to appeal the Ontario Court of Appeal's decision in Indalex Limited (Re) (2011 ONCA 265).(1)

Indalex Limited and its US parent sought protection from their creditors under the Companies' Creditors Arrangements Act and under Chapter 11 of the US Bankruptcy Code. The court authorised a loan under a debtor-in-possession credit agreement and gave the lenders a super-priority charge against Indalex's assets.

On December 1, 2011, the Supreme Court of Canada granted leave to appeal the decision of the Ontario Court of Appeal in Re Indalex Limited, 2011 ONCA 265, which we summarized here.

The Supreme Court of Canada granted leave to appeal yesterday in Indalex Limited (Re). This is an appeal from the Ontario Court of Appeal (2011 ONCA 265). Please see our Financial Services and Banking E-news Bulletin dated April 25, 2011, for a detailed summary of the decision of the Ontario Court of Appeal.

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.‖

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.

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.”