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

Mealey's Insurance Insolvency

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.
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.
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.
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.
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.
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.
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.
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.
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.
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.”
December 19, 2023
N.C. High Court Grants Review Of Fraud Judgment In Insolvent Insurers’ Suit

RALEIGH, N.C. — The North Carolina Supreme Court granted discretionary review to the purchaser of now-insolvent insurers and his affiliated companies’ regarding an appellate court’s decision affirming a judgment for fraud in a breach of contract suit.
December 19, 2023
Unsecured Creditors Update Proposed Liquidation Plan In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — The Official Committee of Unsecured Creditors on Dec. 18 filed an amended proposed combined disclosure statement and Chapter 11 plan of liquidation for the jointly administered cases of Vesttoo Ltd. and 48 affiliates in Delaware federal bankruptcy court.
December 18, 2023
Liquidation Order Prompts Letters, Order In Environmental Claims Row

NEWARK, N.J. — After all parties in a suit over environmental investigation and remediation briefly weighed in on the implications of a different court’s liquidation order pertaining to one defendant, a New Jersey federal magistrate judge delayed a status conference and granted that defendant “leave to file a motion for relief relating to the Liquidation Order.”
December 18, 2023
Flood Insurer Submits List Of Parties Remaining In Hurricane Ida Coverage Dispute

NEW ORLEANS — A flood insurer that was sued for breach of contract for its alleged failure to adequately cover claims related to Hurricane Ida submitted to a federal court a notice advising that the remaining parties are the insured, flood insurer and Louisiana Insurance Guaranty Association (LIGA), as statutory successor for an insolvent homeowner’s insurer.
December 18, 2023
Judge Agrees With Report, Tosses Hurricane Coverage Row With Insolvent Insurer

LAFAYETTE, La. — A Louisiana federal judge granted a woman’s motion to dismiss a hurricane coverage suit against her insolvent homeowners insurer, agreeing with a magistrate judge’s recommendation to dismiss the case after the judge suspended the homeowner’s legal counsel upon discovering that they had made duplicate filings in other cases related to Hurricanes Laura and Delta.
December 14, 2023
Israeli Law Raised In Feedback On Liquidation Plan For Vesttoo And Its Affiliates

WILMINGTON, Del. — In two Dec. 13 filings citing Israeli law and other issues, Vesttoo Ltd. and its affiliated debtors and a venture capital organization and individual that report significant related interests urge a Delaware federal bankruptcy court not to approve a Chapter 11 plan of liquidation and related arrangements as currently proposed.
December 14, 2023
Default Not Entered In Row With Guaranty Association Over Leaky Dishwasher Damage

WEST PALM BEACH, Fla. — A Florida state court deputy clerk issued a notice stating that homeowners’ motion for default will not be granted against the Florida Insurance Guaranty Association (FIGA) in a breach of contract suit filed against it and their insolvent insurer related to purported water damage from a leaking dishwasher.
December 14, 2023
Panel Issues Ruling In $5M Enforcement Action Against Owner Of Insolvent Insurers

RALEIGH, N.C. — A North Carolina appeals court 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 $524,009,051.26 judgment, finding that the lower court lacked jurisdiction to issue the injunction.
December 14, 2023
Louisiana Federal Judge Dismisses Hurricane Coverage Suit After Counsel Suspension

LAFAYETTE, La. — A Louisiana federal judge dismissed a hurricane coverage suit, concurring with a magistrate judge’s report and recommendation to grant a homeowner’s motion for dismissal against his now-insolvent insurer after the judge suspended the homeowner’s legal counsel for purported insurance fraud related to alleged misconduct in filing hurricane-coverage suits.
December 14, 2023
Texas Judge Finds Health Insurer Insolvent, Places It Into Liquidation

AUSTIN, Texas — A Texas state court judge granted the Texas Department of Insurance’s (TDI) application to place Bright Healthcare Insurance Company of Texas into liquidation, appointing the state insurance commissioner as receiver and issuing an automatic stay in any proceeding against the insurer.
December 14, 2023
Insured’s Remand Bid Denied In Hurricane Coverage Row With Insurer In Receivership

NEW ORLEANS — A Louisiana federal judge denied a homeowner’s motion to remand to state court his breach of contract and bad faith suit against his now-insolvent insurer alleging that the insurer failed to cover damage from Hurricane Ida, finding that because the homeowner did not amend his complaint to add the Louisiana Insurance Guaranty Association (LIGA) as a defendant, there is still “complete diversity between the parties.”
December 14, 2023
Chancellor Grants Request To Extend Bar Date In Insolvent Health Plan Liquidation

WILMINGTON, Del. — A Delaware vice chancellor granted parties’ request to extend bar dates as applied to state special deputy receivers for related insolvent health insurers regarding the court’s assignment for the benefit of creditors (ABC) proceeding to liquidate the assets of Friday Health Plans Inc. (FHP) and Friday Health Plans Management Services Co. Inc. (FHP MSC).
November 30, 2023
5th Circuit Affirms Judgment In Civil Rights Suit Involving Guaranty Association

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals affirmed a district court’s grant of summary judgment to an off-duty sheriff’s deputy and the Louisiana Insurance Guaranty Association (LIGA), which intervened on behalf of his insolvent homeowners insurer, in a suit alleging excessive force and civil rights violations regarding the deputy’s restraint of a restaurant customer, finding that video footage shows that the deputy’s “use of force was not clearly excessive or clearly unreasonable” in response to the customer’s “severe intoxication and threatening behavior.”
November 30, 2023
Judge Orders Former CIO To Pay $75,000 To Resolve Insolvent Insurers’ RICO Suit

RALEIGH, N.C. — A North Carolina federal judge issued an order finding a former chief investment officer (CIO) liable and ordering him to pay $75,000 to insolvent insurers in a $1 billion Racketeer Influenced and Corrupt Organizations (RICO) Act suit accusing him, the owner of the insurers and other individuals and affiliated companies of participating in a scheme to defraud the insurers and their policyholders by using policyholder money to purchase non-insurance companies and to divert policyholder money to the owner.
November 27, 2023
Unsecured Creditors Propose Liquidation Plan For Vesttoo And Its Affiliates

WILMINGTON, Del. — The Official Committee of Unsecured Creditors has proposed a Chapter 11 plan of liquidation for the jointly administered cases of Vesttoo Ltd. and 48 affiliates in Delaware federal bankruptcy court, with a Dec. 13 objection deadline.