Mealey's Insurance Insolvency : Mealey's : Legal News & Analysis

Mealey's Insurance Insolvency

April 08, 2024
N.C. High Court Grants Filing Extension To Insolvent Insurers’ Buyer In Fraud Row

RALEIGH, N.C. — The North Carolina Supreme Court on April 5 granted an extension to the purchaser of now-insolvent insurers and his affiliated companies to file a reply brief in their appeal of an appellate court’s decision affirming a judgment for fraud against them.
April 04, 2024
Judge Stays Stock Redemption Row Between Equity Firm And Agent Liquidating Insurer

TAMPA, Fla. — One day after granting in part summary judgment to a private equity firm and limited partnership in a fraudulent transfer of property dispute among the firm and partnership and the liquidator for an insolvent health insurer, a Florida federal judge issued a docket-only order staying and administratively closing the case pending scheduling for trial.
March 28, 2024
Receiver Of Reinsurer In Liquidation Proposes Proof Of Claim Procedures

WILMINGTON, Del. — The receiver for life and health reinsurer Scottish Re (U.S.) Inc. (SRUS) filed motions to set bar dates for two types of claims under proof of claim (POC) procedure proposals filed in the Delaware Chancery Court.
March 27, 2024
N.C. High Court Tosses Clarification Bid In Fraud Row With Insolvent Insurers

RALEIGH, N.C. — The North Carolina Supreme Court dismissed insurers’ motion for clarification of the high court’s order granting a petition for supersedeas regarding an appellate court’s decision affirming a judgment for fraud against the purchaser of now-insolvent insurers and his affiliated companies.
March 26, 2024
4th Circuit Says No Rehearing In Asbestos Coverage Row With Guaranty Association

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals denied an insurer’s request for rehearing and rehearing en banc of the court’s ruling dismissing the insurer’s appeal of a district court’s order remanding to state court a receiver’s asbestos coverage suit against insurers and the South Carolina Property and Casualty Insurance Guaranty Association.
March 21, 2024
Insureds Seek To Vacate Dismissal Of Water Damage Suit Against Insolvent Insurer

WEST PALM BEACH, Fla. — Homeowners moved to vacate a Florida state court’s dismissal of their breach of contract suit against their insolvent insurer and the Florida Insurance Guaranty Association (FIGA) over failure to cover purported water damage from a leaking dishwasher, asserting that their failure to appear was due to a clerical error.
March 19, 2024
Judge Grants Dismissal To Guaranty Association In Hurricane Ida Coverage Dispute

NEW ORLEANS — A Louisiana federal judge dismissed homeowners’ claims against the Louisiana Insurance Guaranty Association (LIGA) in a breach of contract and bad faith suit against it over liability for purported damages caused by Hurricane Ida, finding that because the homeowners voluntarily dismissed the related claims against LIGA, which was substituted for a now-insolvent insurer, LIGA’s motion for partial dismissal is moot.
March 19, 2024
Amended Complaint Proposed In Delaware Suit Over Alleged Asset Dissipation

WILMINGTON, Del. — Plaintiffs in a suit over the “Agera transactions” — a complex asset-swap arrangement that they allege resulted in the “dissipation of at least $250 million” — have moved in Delaware Chancery Court for leave to amend the complaint “to clarify the record and make minimal amendments.”
March 18, 2024
Supplier Seeks Judgment In Asbestos Liability Case Involving Insolvent Insurer

NEW ORLEANS — A purported supplier of asbestos-containing products moved for partial summary judgment and filed a brief in support in an asbestos liability suit against it, the Louisiana Insurance Guaranty Association (LIGA) and multiple other parties over a man’s exposure to asbestos resulting from his work at a shipyard, asserting that partial summary judgment should be granted because the purported supplier was not a “professional vendor.”
March 15, 2024
Judge Adopts Report, Remands Hurricane Coverage Suit Against Guaranty Association

MOBILE, Ala. — An Alabama federal judge adopted a magistrate judge’s report and recommendation that a bad faith and breach of contract hurricane coverage suit against the Alabama Guaranty Association (AIGA) be remanded to state court, agreeing with the magistrate judge’s finding that the suit is “due to be remanded” because the court “lacks subject matter jurisdiction.”
March 14, 2024
Receiver Gets Firm Deadline For Procedures Proposal In Reinsurer’s Liquidation

WILMINGTON, Del. — Modifying a proposed scheduling order, a Delaware Chancery Court vice chancellor has given the receiver for life and health reinsurer Scottish Re (U.S.) Inc. (SRUS) until March 25 to seek approval of proof-of-claim processes and related liquidation procedures.
March 13, 2024
Judge Affirms Stay, Warns Of Sanctions In Student Debt Row With Insolvent Insurer

NEW YORK — A federal judge affirmed a magistrate judge’s order staying a suit filed against an insolvent insurer and multiple parties allegedly involved in a fraudulent debt collection practice resulting in a lien against the purported debtor’s property, finding that the stay order was not “clearly erroneous or contrary to law.”
March 12, 2024
Discovery Orders Granted, Appeal Filed In Vesttoo Chapter 11 Bankruptcy Cases

WILMINGTON, Del. — A notice of appeal has been filed concerning the confirmation of a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates, and a Delaware federal bankruptcy judge on March 11 granted four unopposed motions for leave to conduct discovery against banking entities.
March 11, 2024
Justice Stays, Severs Claims Against Insolvent Insurer In Asbestos Coverage Row

CENTRAL ISLIP, N.Y. — A New York state court justice granted a stay and severed proceedings as to the insured of an insolvent insurer in an estate’s asbestos liability case filed against numerous parties involved in the manufacture and distribution of asbestos-containing products, finding that the claims against the other defendants may go forward without causing undue burden to the estate of the decedent.
March 11, 2024
Judge Amends Consent Decree Order In Case Over Alleged Counterfeit Policies

LOUISVILLE, Ky. — In a March 8 amended ruling entering a consent decree in a sprawling suit over allegations of fraud, trademark counterfeiting and trademark infringement involving captive reinsurance programs, a Kentucky federal judge said he “inadvertently omitted the names of two parties.”
March 11, 2024
Class Certification Bid Draws Opposition In DUFTA Case Involving Insurer

WILMINGTON, Del. — Arguing in part that proposed class representatives “appear to be as unqualified as” one rejected in Gordon v. Sonar Capital Mgmt. LLC, defendants in a suit over an alleged scheme to strip capital from an insurance subsidiary on which many policyholders depend for long-term care (LTC) disability benefits urged the Delaware Chancery Court to deny certification of the proposed class.
March 07, 2024
Panel Affirms Liquidation Order, Says Insurers’ Holding Company Lacked Standing

RALEIGH, N.C. — The North Carolina Court of Appeals affirmed lower court orders placing insolvent insurers into liquidation and denying an intervenor holding company’s motion for a continuance, finding that the lower court did not err when issuing the orders but that because the intervenor lacked standing to intervene, the orders must be modified to show that the intervenor is not a proper party.
March 05, 2024
Liability Insurer Says 10th Circuit Should Affirm Order Barring Coverage In MDL

DENVER — A liability insurer argued in its answer brief in the 10th Circuit U.S. Court of Appeals that the appellate court should affirm a district court’s ruling that it does not owe a duty to indemnify the appellant health insurer in an underlying multidistrict litigation (MDL) antitrust dispute involving an excess errors and omissions (E&O) policy issued by a now-insolvent insurer.
February 29, 2024
U.S. Bankruptcy Judge Approves Liquidation Plan In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — After the latest in a string of recent hearings, a Delaware federal bankruptcy judge on Feb. 29 confirmed a Chapter 11 plan of liquidation for Vesttoo Ltd. and its dozens of affiliates, also approving four settlements — one with a caveat and one with conditions precedent.
February 28, 2024
Settlements Sought, Liquidation Proposal Updated In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — After putting forth several proposed settlements for approval in a Delaware federal bankruptcy court following mediation, the Official Committee of Unsecured Creditors on Feb. 28 filed the latest of its recent amendments to its proposed Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of Vesttoo affiliates.
February 27, 2024
4th Circuit Tosses Appeal Of Asbestos Coverage Row With S.C. Guaranty Association

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on Feb. 26 dismissed an insurer’s appeal of a district court’s order remanding to state court a receiver’s asbestos coverage suit against insurers and the South Carolina Property and Casualty Insurance Guaranty Association, finding that the court does not have jurisdiction over the remand order.
February 23, 2024
Reverse-Preemption Ruling Concerning Adversary Case Is Upheld On Appeal

NEW YORK — Agreeing with a bankruptcy judge’s determination that reverse-preemption under the McCarran–Ferguson Act (MFA) applies, a New York federal judge on Feb. 22 upheld the partial stay of an adversary proceeding in an expansive dispute involving a reinsurer.
February 23, 2024
Pa. High Court Tosses State Law Question Of Joint Underwriting Association Status

PHILADELPHIA — The Pennsylvania Supreme Court dismissed a previously granted petition for certification of a state law question regarding the private or public entity status of the Pennsylvania Professional Liability Joint Underwriting Association (JUA), which provides coverage to health care providers, including those previously insured by insurers in liquidation, finding that the high court “improvidently granted this certification request” because the question “is principally one of federal law.”
February 23, 2024
Firm Deadline Sought For Procedures Proposal In Reinsurer’s Liquidation

WILMINGTON, Del. — Fifty-four cedents and retrocessionares have asked the Delaware Chancery Court to require the receiver for life and health reinsurer Scottish Re (U.S.) Inc. (SRUS) “to move for approval of a proof of claim process and related liquidation procedures” by March 4.
February 22, 2024
Liability Insurer Seeks Extension To Respond In Dispute With Health Insurer

DENVER — A liability insurer moved for an extension to file an answer brief in a health insurer’s appeal to the 10th Circuit U.S. Court of Appeals of a district court’s ruling that the liability insurer does not owe a duty to indemnify the health insurer in an underlying multidistrict litigation antitrust dispute involving an excess errors and omissions (E&O) policy issued by a now-insolvent insurer.