AlphaStar Insurance Group Ltd. ("AlphaStar") (f/k/a Stirling Cooke Brown Holdings Ltd) was a group of companies which provided, among other services, reinsurance brokerage and intermediary services through companies in London, Bermuda and the United States. The companies collapsed and eventually declared bankruptcy, largely as a result of their involvement in the personal accident reinsurance market. Richard E.

The United States District Court for the Middle District of Florida, applying Florida law, has held that exclusions for claims involving the receivership of a healthcare benefit plan and claims involving Multiple Employer Welfare Arrangements (MEWA) barred coverage for claims brought by a receiver of a healthcare benefit plan alleging that brokers sold coverage under a benefit plan that was a MEWA. White v. Cont'l Cas. Co., 2008 WL 2073905 (M.D. Fla. May 14, 2008).

The New York Insurance Department, as Liquidator of Nassau Insurance Company, pursued Jeanne Diloreto for 20 years to recover what it contended were assets diverted from Nassau, recovering a judgment in state court that it attempt to execute upon. Superintendent DiNallo ended up filing an involuntary bankruptcy petition against Ms. Diloreto, which was dismissed, in part based upon procedural infirmities.

A Pennsylvania state court has reportedly ruled, in an unpublished opinion, that the Pennsylvania Insurance Commissioner may pursue a theory of damages against the accountant of an insolvent insurer based on a legal claim of “deepening insolvency.” SeeArio v. Deloitte & Touche, PICS No. 08-1013 (Pa. Commw. Ct.).

The United States Court of Appeals for the 11th Circuit, applying Illinois law in an unpublished decision, has held that Celotex's failure to provide its excess insurers notice of lawsuits claiming more than $2 billion in property damage until after Celotex entered bankruptcy precluded coverage for asbestos-related property damage under numerous policies. Asbestos Settlement Trust v. Cont'l Ins. Co. (in re Celotex Corp.), No. 06-15748, 2008 WL 2637094 (11th Cir. July 7, 2008).

In a recent decision of the United States Bankruptcy Court for the District of Delaware, In re Federal Mogul Global, Inc., No. 01-10578 (JKF) (Bankr. D. Del., Mar. 19, 2008) (click here to read the decision), the court ruled that the assignment of rights in certain insurance policies to an asbestos trust was valid and enforceable under the Bankruptcy Code, and anti-assignment provisions in the policies and applicable state law were preempted.

The United States District Court for the Western District of Pennsylvania has affirmed two final orders of the bankruptcy court finding that (1) the debtor's insurers lacked standing to object to confirmation of the bankruptcy plan; (2) a channeling injunction for silica claims was appropriately included in the debtor's plan; (3) an assignment of the debtor's rights under its insurance policies to the personal injury trust was authorized by bankruptcy law; and (4) the debtor's reorganization plan was confirmable under the Bankruptcy Code. Hartford Accident & Indemnity Co. v.

The United States District Court for the Western District of Pennsylvania has held that an excess liability insurer had no standing to object to a Chapter 11 bankruptcy debtor's reorganization plan where the plan, although requiring contributions from the insurer's policyholder, was not contingent on the policyholder obtaining any funds or proceeds from its insurer. Hartford Accident and Indemnity Co., et al. v. North Am. Refractories Cos. et al., Civ. Action No. 07-1750, Bankr. Case No. 02-20198 (JFK) (W. D. Pa. Jul. 25, 2008).

The United States District Court for the Western District of Pennsylvania dismissed an appeal of an order in Federal Insurance Co. v. Le-Nature's, Inc., 380 B.R. 747 (Bankr. W.D. Pa. 2008), in which the bankruptcy court granted the insurer's motion to compel discovery and ruled that the defendant waived all of his discovery objections, including objections based upon the Fifth Amendment's protection against self-incrimination, for failing timely to assert them. Federal Ins. Co. v. Le-Nature's, Inc., Civil Action No. 08-269 (W.D. Pa. July 25, 2008).

In In re Falcon Products, Inc., 381 B.R. 543 (8th Cir. BAP, 2008), the bankruptcy appellate panel (BAP) for the Eighth Circuit reversed a decision by the bankruptcy court for the District of Missouri, and held that when applying the hypothetical liquidation test to determine whether a secured creditor received potentially preferential payments, the collateral must be valued as of the petition date and not as of the payment transfer date.