Mealey's Insurance Insolvency

  • October 14, 2020

    Panel: Grinnell Factors Aptly Considered In Deeming Securities Settlement Fair

    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).

  • October 13, 2020

    Judge Seeks Objections To Rehabilitation Plan For Time Insurance Company

    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.).

  • October 13, 2020

    Insurer In Rehabilitation Seeks Dismissal Of Counterclaims In Loan Agreement Disputes

    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.).

  • October 13, 2020

    Limited Objection Made Over Bankrupt Insurance Firm’s $11M Settlement

    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.).

  • October 07, 2020

    Judge Stays Billings Dispute Over Environmental Claims Due To Reinsurer's Insolvency

    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.).

  • October 07, 2020

    Insurers In Rehabilitation Seek $14.5M For Borrower's Breach Of Contract

    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.).

  • October 07, 2020

    No Remand Recommended For Insurer's Rehabilitator's Aiding, Abetting Lawsuit

    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.).

  • October 06, 2020

    State Insurance Guaranty Funds: Not A 'Primary Plan' Under Federal Medicare Statute

    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.).

  • October 06, 2020

    Insurer In Rehabilitation Seeks $35.6M For Breach Of Contract By Loan Borrower

    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.).

  • October 05, 2020

    2 Insolvent Insurers Seek $12.5M Under Loan Agreement From Borrower

    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.).

  • October 01, 2020

    U.S. High Court Denies Stay Pending Consideration Of Petition On Arbitration Issue

    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.).

  • October 01, 2020

    Patriot National's Chapter 11 Plan Does Not Affect Insurer's Liquidation

    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.).

  • October 01, 2020

    Panel Reverses Attorney Fees Award Against FIGA In Sinkhole Coverage Dispute

    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).

  • September 30, 2020

    U.S. High Court Asks For Actuarial Firm's Response To Petition On Arbitration Issue

    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.).

  • September 29, 2020

    Former Hedge Funds Executive Seeks To Bar Duplicative Claims From Jury Instructions

    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.).

  • September 28, 2020

    New York Justice Places Park Insurance Company Into Liquidation

    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).

  • September 25, 2020

    Judge: Jurisdiction Exists Over Insolvent Insurer In Suit For $750,000 Judgment

    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).

  • September 24, 2020

    Entities: Claims Arising From Trust Preferred Securities Are Part Of Insurer's Liquidation

    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).

  • September 22, 2020

    Bankrupt Insurance Firm Seeks Approval Of $11M Settlement With Directors

    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.).

  • September 22, 2020

    Reliance Liquidator Seeks Approval Of $152M For Notices Of Determination

    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.).

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