NEW YORK — A federal district court did not abuse its discretion in granting final approval to a $6.5 million settlement in a securities class action lawsuit because the court properly considered each of the nine factors established in City of Detroit v. Grinnell Corp. before determining that the proposed settlement agreement was fair, reasonable and adequate, a Second Circuit U.S. Court of Appeals panel ruled Oct. 2 (Aric McIntire, et al. v. ODS Capital LLC, et al., No. 19-3748, 2nd Cir., 2020 U.S. Dist. LEXIS 31434).
MADISON, Wis. — A Wisconsin judge in a Sept. 28 order asks parties to file any objections to Wisconsin Insurance Commissioner Mark Afable’s rehabilitation plan for Time Insurance Co. (TIC) (In matter of Time Insurance Company, No. 2020-cv-1054, Wis. Cir., Dane Co.).
RALEIGH, N.C. — An insurer that is in rehabilitation filed three similar motions on Oct. 12 to dismiss bad faith and breach of fiduciary duty counterclaims brought by borrowers to loan agreements whom the insurer in three separate lawsuits accuses of breaching payments worth millions of dollars under their loan agreements (Colorado Bankers Life Insurance Company v. Kite Asset Management, LLC, No. 20-371; Colorado Bankers Life Insurance Company v. Summerville Asset Management, LLC, et al., No. 20-432; Colorado Bankers Life Insurance Company v. TAC Investments, LLC, No. 20-453, E.D. N.C.).
WILMINGTON, Del. — Three former directors and officers, who settled in a separate earlier agreement, filed a limited objection on Oct. 9 to a Delaware bankruptcy court with regard to a waiver provision in a second settlement reached by the litigation trustee for Patriot National Inc., a bankrupt insurance firm, with 10 former directors and officers over their alleged waste of $250 million (In re: Patriot National, Inc., Chapter 11, No. 18-10189, D. Del. Bkcy.).
BOSTON — Citing an English reinsurer's recent insolvency and bankruptcy proceedings, a federal judge in Massachusetts on Oct. 5 issued a further stay of a reinsurance billings dispute over the allocation of a $120 million settlement of environmental claims (Certain London Market Company Reinsurers v. Lamorak Insurance Co., No. 18-10534, D. Mass.).
RALEIGH, N.C. — Three insurers in rehabilitation filed an Oct. 2 complaint in a North Carolina federal court seeking to recover $14.5 million from a borrower under a loan agreement for the borrower's breach of contract in failing to make a first interest payment (Colorado Bankers Life Insurance Company, et al. v. Augusta Asset Management, LLC, et al., No. 20-518, E.D. N.C.).
BATON ROUGE, La. — Applying Delaware law, a federal magistrate judge in Louisiana on Oct. 2 recommended denying an insolvent insurer's rehabilitator's motion to remand his lawsuit regarding aiding and abetting fraud and breach of fiduciary duty claims as to loans that allegedly misled state insurance regulators on the insurer's finances because one of the defendants was improperly joined (James J. Donelon v. Jeffrey C. Pollick, et al., No. 20-177, M.D. La.).
The Illinois Insurance Guaranty Fund (IIGF) and North Carolina Insurance Guaranty Association (NCIGA) filed identical complaints on Oct. 5 in federal courts, alleging that they are not a "primary plan" or "applicable plan" under the federal Medicare Secondary Payer (MSP) statute but rather "a source of last resort, when an insurance company becomes insolvent" (Illinois Insurance Guaranty Fund v. Alex M. Azar, II, et al., No. 20-5920, N.D. Ill.; North Carolina Insurance Guaranty Association v. Alex M. Azar, II, No. 20-522, E.D. N.C.).
RALEIGH, N.C. — On Oct. 2, a health insurer in rehabilitation filed a complaint in a North Carolina federal court, seeking to recover $35.6 million minus partial payments from a borrower of a loan agreement for the borrower's breach of contract (Colorado Bankers Life Insurance Company v. Tybee Island Asset Management, LLC, et al., No. 20-520, E.D. N.C.).
RALEIGH, N.C. — Two insurers in rehabilitation filed a complaint on Oct. 2 in a North Carolina federal court seeking $12.5 million from a borrower under a loan agreement (Colorado Bankers Life Insurance Company, et al. v. Academy Financial Assets, LLC, et al., No. 20-517, E.D. N.C.).
WASHINGTON, D.C. — U.S. Supreme Court Associate Justice Samuel Alito on Sept. 23 denied an actuarial services firm's request for a stay pending disposition of its petition asking whether the Louisiana insurance commissioner, as rehabilitator for a health insurance cooperative, can pursue a professional negligence suit in court or is bound by an arbitration clause in an agreement between it and the cooperative (Milliman, Inc. v. James J. Donelon, No. 20-299, U.S. Sup.).
WILMINGTON, Del. — The Chapter 11 confirmation plan of Patriot National Inc. does not interfere with the Delaware insurance commissioner's ability to recover assets based upon the liquidation of another insurance company, a Delaware federal judge ruled Sept. 30, affirming a state federal bankruptcy judge's confirmation and jurisdiction orders (In re Patriot National, Inc., et al., Chapter 11, No. 18-10189, [Trinidad Navarro v. Patriot National, Inc., No. 18-751], D. Del.).
LAKELAND, Fla. — A Florida appeals panel on Sept. 30 reversed an insured's attorney fees award because a lower court's application of the confession of judgment doctrine ignored the limitations on Florida Insurance Guaranty Association's (FIGA) obligations for the insured's pursuit of a sinkhole claim not covered by a policy (Florida Insurance Guaranty Association v. Yanicet Reyes, No. 2D19-2173, Fla. App., 2nd Dist., 2020 Fla. App. LEXIS 13696).
WASHINGTON, D.C. — The U.S. Supreme Court on Sept. 28 requested a response from an actuarial firm concerning a petition by an insolvent health insurer's liquidator and special deputy liquidator on whether they should be compelled to arbitrate common-law tort claims against the firm based upon an arbitration provision in a preinsolvency agreement between the insurer and the firm (Doug Ommen, et al. v. Milliman, Inc., et al., No. 20-249, U.S. Sup.).
NEW YORK — Prior to trial in a case over the collapse of hedge funds, a former member of Platinum Management (NY) LLC on Sept. 25 asked a New York federal court to exclude jury instructions on claims for fraud, constructive fraud, aiding and abetting breach of fiduciary duty and aiding and abetting fraud as duplicative and to consolidate two breach of fiduciary claims so a jury will be charged with only one (In re Platinum-Beechwood Litigation, No. 18-6658, Martin Trott, et al. v. Platinum Management [NY] LLC, et al., No. 18-10936, S.D. N.Y.).
NEW YORK — A New York justice ordered Park Insurance Co. into liquidation on Sept. 22, noting, among other reasons, that the taxi insurer's surplus had been reduced by $1.75 million for an unapproved reinsurance agreement with a related entity (Maria Vullo v. Park Insurance Company, No. 452877/2017, N.Y. Sup., New York Co., 2020 N.Y. Misc. LEXIS 6408).
LOUISVILLE, Ky. — Despite an insolvent insurer's contention that jurisdiction resides in its liquidation proceeding, a Kentucky federal judge on Sept. 24 refused to dismiss or remand a claimant's suit against the insurer and others over a $750,000 truck crash judgment because there is jurisdiction given the limited scope of relief being sought (George Gillett v. Spirit Commercial Auto Risk Retention Group, Inc., et al., No. 19-260, W.D. Ky., 2020 U.S. Dist. LEXIS 175615).
SAN FRANCISCO — Defendants in a New York action concerning trust preferred securities (TruPS) argue in an Aug. 28 response brief that a lower court properly enjoined the New York plaintiffs' claims potentially worth hundreds of millions of dollars because the claims were based on damages to an insolvent insurer and, thus, property to the insurer's estate and liquidation proceeding (Dave Jones v. CastlePoint National Insurance Co., No. A158646, Calif. App., 1st Dist., Div. 5).
WILMINGTON, Del. — The litigation trustee for Patriot National Inc., a bankrupt insurance firm, asks a Delaware bankruptcy court in a Sept. 18 motion to approve an $11 million settlement with 10 former directors and officers as to a separate Delaware state court suit over their alleged waste of $250 million (In re: Patriot National, Inc., Chapter 11, No. 18-10189, D. Del. Bkcy.).
HARRISBURG, Pa. — In her Sept. 16 report, Reliance Insurance Co.'s liquidator recommends that a Pennsylvania trial court approve and allow $152,356,646.13 for 34,443 notices of determination (NODs) (In re: Reliance Insurance Co. in liquidation, No. 1 REL 2001, Pa. Cmwlth.).