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Mealey's Insurance Insolvency

  • October 20, 2020

    Bankruptcy Judge Grants $14M Settlements In Favor Of Patriot National Inc.

    WILMINGTON, Del. — A Delaware bankruptcy judge on Oct. 16 approved two separate settlements totaling close to $14 million that were reached between Patriot National Inc.’s litigation trustee and 13 former directors and officers of the bankrupt insurance firm over their alleged corporate waste (In re:  Patriot National, Inc., Chapter 11, No. 18-10189, D. Del. Bkcy.).

  • October 20, 2020

    Health Plan’s Receiver Seeks $6M Default Judgments In Suit Over Fraudulent Transactions

    ANDERSON, S.C. — The special deputy receiver of a multiple-employer self-insured health plan on Oct. 16 asked a South Carolina federal court for default judgments worth $6 million against parties being accusing of defrauding the health plan by entering into fraudulent transactions via letters of credit (LOCs) (Michael J. FitzGibbons v. Alton Atkinson, et al., No. 17-2092, D. S.C.).

  • October 20, 2020

    Judge Stays Insurer’s Redress Suit In Light Of Liquidation Order Appeal

    NEW YORK — A New York federal judge on Oct. 16 issued a further stay of an insurer’s lawsuit seeking redress for violation of its equal protection rights against New York Superintendent of Financial Services Linda Lacewell in light of the insurer’s appeal of a recent liquidation order against it (Park Insurance Co. v. Maria T. Vullo, et al., No. 18-9628, S.D. N.Y.).

  • October 19, 2020

    Judge: United States May Seek Debt Setoffs In ACA Risk-Corridor Case

    WASHINGTON, D.C. — The government may amend its answer to seek setoffs against risk-corridor liabilities it owes to largely insolvent insurers under the Patient Protection and Affordable Care Act (ACA) risk corridor, a federal judge in the U.S. Court of Federal Claims said Sept. 30 in finding that amendment would be neither untimely nor prejudicial (Health Republic Insurance Co. v. United States, No. 16-259C, Fed. Clms., 2020 U.S. Claims LEXIS 1898).

  • October 16, 2020

    Reliance Liquidator Seeks Approval Of $16.9M For Final Notices Of Determination

    HARRISBURG, Pa. — The liquidator of Reliance Insurance Co. in an Oct. 13 application asks a Pennsylvania trial court for an order approving her recommendation on the last notices of determination (NODs) for state guaranty associations, which includes an allowed amount of $16.9 million for class (e) claims (In re:  Reliance Insurance Co. in liquidation, No. 1 REL 2001, Pa. Cmwlth.).

  • October 16, 2020

    Justice Places OneTitle National Guaranty Co. Inc. Into Liquidation

    NEW YORK — OneTitle National Guaranty Co. Inc. was ordered into liquidation on Oct. 6 by a New York justice who also appointed the state’s superintendent of Financial Services as the liquidator (In matter of OneTitle National Guaranty Company, Inc., No. 451834/2020, N.Y. Sup., New York Co.).

  • October 15, 2020

    Insurer’s Receiver Has No Right To Assert Direct Claims, D&O Insurer Says

    OKLAHOMA CITY — BancInsure Inc.’s receiver has no right under Oklahoma law to assert direct claims against a directors and officers (D&O) insurer arising from the denial of coverage to a BancInsure director, the D&O insurer tells an Oklahoma federal court in an Oct. 14  motion to dismiss (Glen Mulready v. Westchester Fire Insurance Company, No. 20-782, W.D. Okla.).

  • October 15, 2020

    Former Executive Of Hedge Funds Seeks To Exclude Punitive Damages At Trial

    NEW YORK — A former member of Platinum Management (NY) LLC on Sept. 29 asked a New York federal court to preclude any references to punitive damages in his trial over a breach of fiduciary claim regarding the collapse of hedge funds and to exclude punitive damages from the jury’s instructions (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.).

  • October 14, 2020

    Insurer In Default For Not Responding To Breach Of Contract Case, Insured Says

    NEWARK, N.J. — An industrial equipment supplier on Oct. 13 asked a New Jersey federal court to enter a default against an insurance company in its breach of contract case regarding the insurer’s refusal to pay for an environmental investigation and remediation at its property (Industrial Corner Corp. v. Public Service Mutual Insurance Company, No. 20-6677, D. N.J.).

  • 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.).