The administrator who is running off the business of English (re)insurer GLOBAL General & Reinsurance Company Ltd filed a petition under Chapter 15 of the United States Bankruptcy Code with the federal bankruptcy court in Manhattan yesterday. The petition asks for the court's assistance with the last of four Schemes of Arrangement for GLOBAL, which was sanctioned by the High Court of Justice for England & Wales on January 28, 2011.
According to pleadings filed with the US court, the current Scheme seeks to crystallize and resolve claims arising mainly under reinsurance of direct insurance underwritten by GLOBAL from 1989 until October 2002, when it went into runoff. The book being schemed consists largely of liability and motor business, with some additional property and marine business.
Court filings represent that the relief sought under Chapter 15 relates solely to parties in the United States. They ask for injunctive and other necessary relief to give effect to the UK-sanctioned Scheme. The Scheme representative asserts that all claims valued pursuant to the Scheme's valuation methodology will be paid in full. The pleadings report that three previous Schemes of Arrangement were sanctioned by the High Court, with U.S. Chapter 15 relief being sought and obtained for two:
- A scheme respecting the majority of the company's direct insurance business, sanctioned by the High Court in February 2006;
- A scheme involving the company's interests in the GLM Pool, sanctioned by the High Court in 2007 and thereafter granted Chapter 15 relief by the US bankruptcy court in Manhattan; and
- A scheme respecting the company's pre-1989 business (1940-1988), sanctioned by the High Court in 2009 and thereafter granted Chapter 15 relief by the US bankruptcy court in Manhattan.
A hearing on the Chapter 15 Petition has been requested for February 28, 2011, with objections due no later than five days prior to the hearing.
The case has been assigned to United States Bankruptcy Judge Robert D. Drain and is Chapter 15 Case No. 11-10327, United States Bankruptcy Court for the Southern District of New York. All court filings are available through PACER.
Chapter 15 of the United States Bankruptcy Code became effective on October 17, 2005, and replaced former Code Section 304. Edwards Angell Palmer & Dodge LLP has extensive experience with Chapter 15, representing both foreign debtors and U.S. and foreign creditors. The Firm filed the first pleadings interpreting new Chapter 15, in a case seeking U.S. relief in aid of a scheme of arrangement for a book of insurance business in runoff.