The United States District Court for the Northern District of Illinois, applying Illinois law, has ruled that an insolvency exclusion barred coverage for claims arising out of an insurance broker’s placement of coverage with an insolvent insurance association. American Automobile Insurance Co. v. B.D. McClure & Associates, Ltd., 2011 WL 211204 (N.D. Ill. Jan. 21, 2011).

Recent news reports have focused on the problems of the financial markets on the one hand and consumer mortgage problems on the other. While Congress may yet grant authority to bankruptcy judges to modify home loans, modification of business loan facilities of all sizes remains available as a powerful and fundamental tool to be used in a business financial restructuring.

The district court in Hartford Accident & Indemnity Company, et al. v. American Capital Equipment, et al., No. 06-0891 (U.S. Dist. Ct. W.D. Pa. May 11, 2007), affirmed that Skinner Engine Company's insurers have standing to move to dismiss Skinner's chapter 11 bankruptcy case and to challenge its bankruptcy plan. However, the court also affirmed the bankruptcy court's denial of the insurers' motion to dismiss the bankruptcy case.

The Superior Court of New Jersey has ruled that Congoleum's pre-packaged bankruptcy plan settling asbestos claims is not enforceable against its insurers. The court found that the plan was unreasonable and that, under the terms of the plan, insurance obligations are not triggered because it was not shown that Congoleum was "legally obligated to pay" the claimants who would receive payments. Congoleum Corp. v. Ace American Insurance Co., No. MID-L-8908-01 (N.J. Super. Ct. May 18, 2007).

In the ongoing bankruptcy action involving the Congoleum Corporation (Congoleum), the bankruptcy court refused to approve a settlement and policy buyback between Congoleum and one of its insurers, ruling that the lack of creditor support for the settlement and the lack of evidence regarding the volume and type of claims covered by the settlement precluded the court's ability to approve the settlement. In re Congoleum Corporation, No. 03-51524 (Bankr. D.N.J. May 11, 2004).

The Second Circuit Court of Appeals issued a summary order this week upholding the aggressively unfavorable treatment of a senior secured creditor under the reorganization plan (the “Plan”) of DBSD North America, f/k/a ICO North America (“DBSD”).

The chapter 11 case of DBSD North America, Inc. (“DBSD”), f/k/a ICO North America, has been marked by aggressive tactics and extreme positions from its commencement. DBSD, a non-operating satellite communications company, and its second lien noteholders made clear their intent to cram down a plan of reorganization (the “Plan”) on DBSD’s first lien lenders.

IN RE: SOUTH BEACH SECURITIES (May 19, 2010)

Fred Wilpon, Saul Katz, and their families and affiliated enterprises (the “Wilpon/Katz Group”) last week formally requested the dismissal of the adversary proceeding commenced by Irving Picard, the trustee of Bernard L. Madoff Investment Securities LLC (“BLMIS”). In a two hour hearing before U.S.

The well known travails of Fred Wilpon, the principal owner of the New York Mets, have all converged this past week. He, his partner Saul Katz and their families and affiliated enterprises (the “Wilpon/Katz Group”) lost several hundred million dollars when Bernard Madoff’s long running Ponzi scheme finally unraveled at the height of the financial crisis in 2008.