Mealey's Insurance Insolvency
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February 01, 2024
Federal Judge Tosses Hurricane Coverage Case After Suspending Homeowner’s Counsel
LAFAYETTE, La. — A Louisiana federal judge adopted a magistrate judge’s report and recommendation to dismiss for failure to prosecute after a homeowner failed to attend a status conference in her hurricane coverage suit against her now-insolvent insurer following the judge’s termination of her legal counsel.
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February 01, 2024
Late Objection Bid Draws Opposition In Vesttoo Chapter 11 Cases
WILMINGTON, Del. — Asserting that “Vesttoo’s defrauded creditors have overwhelmingly voted to accept” a Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of its affiliates, two creditors are among the entities urging a Delaware federal bankruptcy court to reject a motion to allow an untimely objection to claims against one of the affiliates.
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January 31, 2024
4th Circuit Hears $524M Guaranty Case Involving Reinsurance Agreement
RICHMOND, Va. — In oral argument before a Fourth Circuit U.S. Court of Appeals panel, the issuer of a guaranty contended that a judgment against him enforcing an arbitration award for $524 million plus interest should be overturned, and a Puerto Rico-based insurer countered that the terms of the agreements in question and res judicata both support affirmation.
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January 30, 2024
Vice Chancellor Mostly Denies Dismissal In Suit Over Asset Dissipation
WILMINGTON, Del. — Ruling on four long-pending motions in a suit over a complex asset-swap transaction that the plaintiffs argue resulted in the “dissipation of at least $250 million,” a Delaware vice chancellor granted dismissal only as to a claim of fraudulent trading under Cayman Islands law.
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January 25, 2024
Plaintiffs Make Class Certification Arguments In DUFTA Row Involving Insurer
WILMINGTON, Del. — Asserting that their Delaware Uniform Fraudulent Transfer Act (DUFTA) claims “focus exclusively on Defendants’ conduct and circumstances,” policyholders and agents challenging an alleged scheme to strip capital from an insurance subsidiary on which more than 1 million policyholders depend for long-term care (LTC) disability benefits urged the Delaware Chancery Court to certify their proposed class.
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January 25, 2024
Vesttoo Bankruptcy Debtors: Proceeding In Israel Would Be More Efficient
WILMINGTON, Del. — A variety of objections have been lodged in Delaware federal bankruptcy court regarding the Official Committee of Unsecured Creditors’ Chapter 11 plan of liquidation for Vesttoo Ltd. and 48 affiliates, including one in which the debtors argue that the cases should be dismissed “so that more efficient insolvency proceedings can be filed in Israel.”
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January 23, 2024
Dismissal Stipulated In Asbestos Coverage Dispute Involving Guaranty Association
COLUMBIA, S.C. — Remaining defendant insurers stipulated to dismissal in a South Carolina federal court of cross-claims by or against two defendant insurers that were previously dismissed from a receiver’s asbestos coverage suit against insurers and the South Carolina Property and Casualty Insurance Guaranty Association.
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January 23, 2024
Magistrate Extends Discovery Deadline In Rehabilitator’s Suit Against D&O Insurers
INDIANAPOLIS — An Indiana federal magistrate judge granted parties’ joint motion to extend a discovery deadline in a breach of contract suit filed by the Pennsylvania insurance commissioner, as rehabilitator of an insurer, against primary and excess directors and officers (D&O) insurers.
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January 23, 2024
Homeowner Sues Insurer, Guaranty Association, Seeks Coverage For Hurricane Damage
JACKSONVILLE, Fla. — A Florida homeowner sued his now-insolvent insurer and the Florida Insurance Guaranty Association (FIGA) in a Florida state court, asserting claims for breach of contract and violations of Florida law for failure to adequately cover purported losses related to Hurricane Ian.
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January 23, 2024
Judge OKs Adding Guaranty Association In Bad Faith Suit Against Insolvent Insurer
NEW ORLEANS — A Louisiana federal judge granted a homeowner’s motion to file an amended complaint to add as a defendant the Louisiana Insurance Guaranty Association (LIGA) in a breach of contract and bad faith suit against a now-insolvent homeowners insurer over its purported failure to adequately cover damage caused by Hurricane Ida, finding that amending the complaint is necessary due to the insurer’s insolvency and that the case must be remanded because complete diversity is destroyed.
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January 22, 2024
Insolvent Insurers’ Owner Opposes Injunction After Ordered To Pay $576M Judgment
GREENSBORO, N.C. — The owner of insolvent insurers filed a brief in a North Carolina federal court, opposing an insurer’s motion for an injunction to prevent the owner from transferring assets after a North Carolina federal judge issued a judgment requiring the owner to pay more than $576 million pursuant to a personal guaranty for a reinsurance agreement.
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January 22, 2024
Bad Faith Claim Against Guaranty Association Dismissed In Hurricane Coverage Row
NEW ORLEANS — A Louisiana federal judge granted partial dismissal to the Louisiana Insurance Guaranty Association (LIGA), which was substituted for an insolvent homeowners insurer, in a breach of contract suit over damages from Hurricane Ida, finding that the claims for bad faith, mental anguish, penalties, pre-insolvency costs and interest must be dismissed because they are not covered claims for which “LIGA is the statutory successor.”
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January 19, 2024
Dismissal Denied In Suit Against Life Insurer Regarding ‘Leapfrogging’ Policy
CINCINNATI — An Ohio federal judge denied dismissal of a breach of contract suit filed against a life insurer by the liquidating trustee for a viatical settlement provider, finding that the complaint was timely filed because Ohio law applies to the dispute over a “leapfrogging” life insurance policy that was sold to the trust.
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January 18, 2024
Committee Seeks To Bar Some Claimants In Vesttoo Cases From Liquidation Vote
WILMINGTON, Del. — The Official Committee of Unsecured Creditors on Jan. 17 asked a Delaware federal bankruptcy court to reclassify 49 disputed claims so the joint provisional liquidators (JPLs) that submitted them can’t vote on the committee’s Chapter 11 plan of liquidation for Vesttoo Ltd. and 48 affiliates.
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January 17, 2024
Parties Stipulate To Dismissal In Defense Costs Row Involving Liquidation
NEW CASTLE, Del. — All claims and counterclaims in a defense costs dispute in the Delaware Superior Court that centers on whether reinsurer Alpha Re’s 2018 liquidation triggered an exclusion have been dismissed without prejudice under a stipulation in which the parties reported entering into an unspecified “Tolling & Standstill Agreement.”
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January 17, 2024
Extension Granted In N.C. High Court Review Of Judgment Against Insolvent Insurers
RALEIGH, N.C. — The North Carolina Supreme Court granted a one-day extension to the purchaser of now-insolvent insurers and his affiliated companies to respond to a 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.
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January 16, 2024
Class Certification Sought In DUFTA Suit Concerning Long-Term Care Insurer
WILMINGTON, Del. — Policyholders who filed a Delaware Uniform Fraudulent Transfer Act (DUFTA) suit over what they allege were fraudulent transfers from an insurance subsidiary on which more than 1 million policyholders depend for long-term care (LTC) disability benefits filed a motion on Jan. 12 in Delaware Chancery court for class certification.
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January 11, 2024
Insurer Seeks N.C. High Court Review In Row Involving Insolvent Insurers’ Owner
RALEIGH, N.C. — A Puerto Rico-based insurer petitioned the North Carolina Supreme Court to review an appeals court decision that vacated a lower court injunction enjoining the owner of insolvent insurers from withdrawing without the North Carolina Insurance commissioner’s consent more than $5,000 from any entity controlled by the owner in an enforcement action for a $524 million judgment, arguing that the appellate court decision is contrary to Supreme Court precedent.
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January 09, 2024
Pennsylvania Appeals Judge Approves Settlement Agreement In Insurers’ Liquidation
HARRISBURG, Pa. — A Pennsylvania appellate court judge issued an order granting an application for approval of a settlement agreement and approved the settlement agreement filed by the Pennsylvania insurance commissioner to settle the claims against Penn Treaty Network America Insurance Company and its subsidiary American Network Insurance Co., companies in liquidation, made by various state guaranty associations responsible for satisfying the companies’ policy obligations.
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January 04, 2024
1 Defendant Files Status Report In Insurer’s Suit Over Asbestos Liabilities Row
OMAHA, Neb. — Evaluating proof of claims in separate liquidation proceedings “is expected to take several years,” a defendant told a Nebraska federal court in its latest status report in a suit over the $157.2 million settlement National Indemnity Co. (NICO) reached with Montana regarding alleged asbestos exposures.
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January 02, 2024
Committee Gets OK For Vote On Liquidation Plan In Vesttoo Chapter 11 Cases
WILMINGTON, Del. — A Delaware federal bankruptcy judge who is allowing the Official Committee of Unsecured Creditors to put its Chapter 11 plan of liquidation for Vesttoo Ltd. and 48 affiliates to a vote also granted its motions for leave to conduct discovery against two banking organizations.
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January 02, 2024
Collapsed Hedge Fund’s Co-Founder Withdraws Appeal Over Offset Ruling
NEW YORK — A co-founder of the collapsed hedge fund Platinum Partners who argued that application of New York offset law should reduce his liability to zero has withdrawn his Second Circuit U.S. Court of Appeals challenge to a ruling that left him liable for just under $2.8 million.
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December 20, 2023
Counsel’s Withdrawal Request Granted In Founder’s Suit Against Insolvent Insurer
DENVER — A Colorado state court judge granted a motion to withdraw filed by counsel for Friday Health Plans Management Services Co. Inc. (FHP MSC), a subsidiary of insolvent health insurer Friday Health Plans Inc. (FHP), in a breach of contract suit filed by FHP’s co-founder and former president, seeking severance after he was terminated purportedly without cause.
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December 20, 2023
Insurance Agents Must File Motion To Seal In Dispute Involving Insolvent Insurer
GREENSBORO, N.C. — A North Carolina federal magistrate judge on Dec. 19 issued a docket-only order requiring insurance agents and agencies to file a motion to seal in a consolidated class action against a purported holding company for an insolvent insurer and the insurer’s owner, asserting that the holding company breached the contract with the agents and agencies by failing to pay them commissions pursuant to their contracts.
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December 19, 2023
Asbestos Firms, Insolvent Insurer Group Drop Appeal Over Settlement
NEW ORLEANS — A Louisiana federal judge dismissed an appeal by two asbestos law firms of a federal bankruptcy court’s approval of a $1 million settlement between the Chapter 7 trustee for a bankrupt insulation supplier and the Louisiana Insurance Guaranty Association (LIGA) after the parties said in a joint motion to dismiss that they have “resolved their differences.”