Since the Transfer of Undertakings (Protection of Employment) Regulations 2006 were made in order to implement the European Union’s Council Directive 80/987/EEC, there has been an ongoing debate on how regulation 8 (7) (the bankruptcy proceedings exception) should be interpreted. Fortunately, a recent decision by the Employment Appeals Tribunal has gone some way towards clarifying the issue.
The administrator who is running off the business of English (re)insurer GLOBAL General & Reinsurance Company Ltd filed a petition under Chapter 15 of the United States Bankruptcy Code with the federal bankruptcy court in Manhattan yesterday. The petition asks for the court's assistance with the last of four Schemes of Arrangement for GLOBAL, which was sanctioned by the High Court of Justice for England & Wales on January 28, 2011.
As we reported earlier in the week, the Federal Deposit Insurance Corporation ("FDIC") has begun filing lawsuits against the directors and officers of banks that it now holds in receivership . The lawsuits are consistent with previous public statements in which the FDIC committed to try to recover, from the directors and officers of these failed banks, some of the $2.5 billion lost to bad loans in recent years.
A New York appeals court recently dismissed one of two lawsuits filed against MBIA Inc. (“MBIA”) by more than a dozen major financial institutions concerning the bond insurer’s financial restructuring. The plaintiffs – owners of insurance policies issued by MBIA for structured finance products, including residential mortgage-backed securities – claimed that the bond insurer’s split into two units was intended to defraud policyholders.
Venezuela's socialist government has ordered the takeover of Seguros Federal, a local insurance company that was part of a financial group under investigation for reported insolvency issues.
The decree issued in Official Gazette No. 39,580 on December 23, 2010, provided for the "forced acquisition" of all of Seguros Federal's assets. The assets will be used by the government to build its Socialist System of Insurance Activity which aims to provide insurance products to the poorest sectors of society.
The implications of taking an appointment over an insolvent business which is regulated by environmental law can be far reaching. Environmental regulation has become more stringent and the sanctions for breach can leave the IP exposed to liability, including (amongst other things) costs sanctions.
The main environmental regimes referred to in this update are the contaminated land and water pollution regimes.
On 14 December 2010 the English Court sanctioned four connected schemes of arrangement for German companies in the Tele Columbus group.
In the case of banking institutions dealing with the unique world of insurance insolvency, the results may not be as dramatic as in other cultural clashes, but they can be equally confused. This is because insurance insolvency operates in its own separate world, where the usual rules of bankruptcy do not apply and where, without appropriate safeguards, having a secured claim may not guarantee repayment. For banks and other secured creditors, lending to insurance companies is governed by a separate set of rules to which careful attention must be paid.
The United States Supreme Court declined to review a Second Circuit decision wherein a bankruptcy trust fund established to reimburse asbestos victims while barring them from future lawsuits against insurers was held to not apply to Chubb Indemnity Insurance Co. In the underlying matter, Chubb sought contribution for asbestos injury claims from The Travelers Indemnity Co. The trust was established in 1986 by a bankruptcy court and funded with hundreds of millions of dollars from insurers for the benefit of asbestos claimants and their families.
As previously discussed here, Ambac Financial Group Inc. has filed for bankruptcy for Chapter 11 bankruptcy relief with United States Bankruptcy Court for the Southern District of New York. Immediately following its bankruptcy filing, Ambac sued the United States to block the Internal Revenue Service from placing a lien on its assets in an attempt to recover an estimated $700 million in tax refunds that the agency believes it may be owed.