On April 16, 2012, the Supreme Court of the State of New York, Nassau County, entered an Order of Liquidation and Approval of the ELNY Restructuring Agreement (Order) and accompanying memorandum decision. The Order was entered over the objections of a number of ELNY payees, and followed an 11 day hearing that took place in March 2012.
On April 30th, the FDIC issued a final rule that treats a mutual insurance holding company as an insurance company for purposes of Section 203(e) of the Dodd-Frank Act. The new rule clarifies that the liquidation and rehabilitation of a covered financial company that is a mutual insurance holding company will be conducted in the same manner as an insurance company.
The United States Bankruptcy Court for the Southern District of New York has lifted the automatic stay in bankruptcy to permit D&O and E&O insurers to advance or reimburse insured directors,’ officers’ and employees’ reasonable defense costs incurred in underlying litigation arising out of the insured company’s collapse. In re MF Global Holdings Ltd., et al., No. 11-15059 (MG) (Bankr. S.D.N.Y. Apr. 10, 2012)
InYessenow v. Executive Risk Indemnity, Inc., 2011 IL App 102920, 953 N.E.2d. 433 (1st Dist.
The United States Bankruptcy Court for the Western District of Louisiana has held that an insured versus insured exclusion does not apply to preclude coverage for claims brought by a duly appointed bankruptcy trustee against an insolvent corporation’s directors and officers. Central Louisiana Grain Cooperative v. Vanderlick, 2012 WL 293173 (Bankr. W.D. La. Jan. 31, 2012).
On March 20, the Federal Deposit Insurance Corporation (FDIC) proposed a rule (Proposed Rule), with request for comments, that implements section 210(c)(16) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act or the Act) , which permits the FDIC, as receiver for a financial company whose failure would pose a significant risk to the financial stability of the United States (a covered financial company), to enforce contracts of subsidiaries or affiliates of the covered financial company despite contract clauses that purport to terminate, accelerate, or provide
A court affirmed the denial of W.R. Grace & Co.’s asbestos insurance claims against the liquidation estate of Grace’s insolvent excess-of-loss insurer, on the ground that Grace failed to submit timely “absolute” claims under New Jersey’s version of the Uniform Insurers Liquidation Act. Grace, which has been undergoing bankruptcy restructuring, had established a plan with a creditor’s committee to create a trust to pay asbestos claims.
Reliance Insurance Company in Liquidation (the “Liquidator”) petitioned a Pennsylvania state court for a declaratory judgment holding that Aramark Corporation must reimburse certain state guaranty associations (“GAs”) for claims allegedly improperly paid to Aramark and subsequently presented to the Reliance Estate by the GAs for payment. The Liquidator also sought a declaration that Aramark’s claims against the Estate should be given low priority.
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 its recent decision in Sunnyside Dev. Co.,LLC v. Chartis Specialty Ins. Co., 2012 U.S. Dist. LEXIS 9392 (S.D.N.Y. Jan. 26, 2012), the United States District Court for the Southern District of New York demonstrated the consequences that an insurer faces when allowing an insured to default.