On September 24, 2013, in Farmers Mut. Fire Ins. Co. v. NJPLIGA, N.J. , 2013 WL5311272 (2013), the New Jersey Supreme Court ruled that policy limits of solvent insurers must be exhausted before the New Jersey Property‐ Liability Insurance Guaranty Association ("NJPLIGA") could be responsible for long‐tail claims under policies issued by insolvent insurers. NJPLIGA is a statutory entity created to provide New Jersey policyholders with protection when insurers become insolvent.
Last year, a U.S. bankruptcy court held that a bankruptcy trustee could settle a Financial Industry Regulatory Authority (“FINRA”) suit against a broker-dealer by its former employee seeking damages and expungement of alleged false and defamatory FINRA Form U-5 termination disclosure language, over the objection of the former employee-debtor.2 Once a bankruptcy case is filed by a former employee, the claims become property of the bankruptcy estate.
As the controversy around the possible sale of the Detroit Institute of Arts’ collectioncontinues to swirl, Emergency Manager Kevyn Orr has given some of his most pointed comments to date about his expectations.
In a recent Ninth Circuit case, Carpenters Pension Trust Fund for Northern California v. Moxley, 2013 WL 4417594 (9th Cir. 2013), the court held that an employer's withdrawal liability was dischargeable in bankruptcy. In this case, the employer filed for bankruptcy protection after the Pension Fund assessed withdrawal liability.
In Burcam Capital II, LLC v. Bank of America, N.A., et al, No. 13-00063-8 (Bankr. E.D. N.C. Oct. 1, 2013), an adversary proceeding filed in In re: Burcam Capital II, LLC, No. 12-04729-8, in the United States Bankruptcy Court for the Eastern District of North Carolina, the court held that the Debtor Plaintiff alleged sufficient facts to support a claim that its lender and the special servicer of the loan breached their duty to act in good faith and to deal fairly.
The Bottom Line:
A liability insurance company has the right to take over the defense of a policyholder and to control all settlement discussions. What happens if the carrier fails to pursue settlement negotiations with sufficient zeal, knowing full well that it was leaving the insured exposed to liability above policy limits? You may be at risk in California if your insurer does this to you.
Summary
Eastman Kodak Corporation (Kodak US), the US parent of the Kodak group, filed for chapter 11 protection in the US on 19 January 2012. It successfully emerged from bankruptcy on 3 September 2013 as a new restructured technology company focused on imaging for businesses. Many other Kodak companies throughout the world were able to avoid following in their parent’s footsteps and were maintained as going concern businesses while the US bankruptcy process was ongoing.
On October 17, Fannie Mae issued Servicing Guide Announcement SVC-2013-21, which revises servicers’ responsibilities in finalizing standard deed-in-lieu of foreclosures (DILs).