English & American MMC Claims Scheme of Arrangement Sanctioned and Final Bar Date
English & American Insurance Company (“EAIC”) has proposed and received sanction for a new scheme of arrangement to finalize the “Marsh Mac Claims” that were excluded under its 2011 scheme of arrangement. Marsh Mac Claims were covered under EAIC and Slater Walker policies issued through Institute of London Underwriters (“ILU”) between July 3, 1980, and October 6, 1983. These claims are protected by an irrevocable letter of credit from Marsh & McLennan. All Marsh Mac Claims creditors must submit their final claims forms by May 9, 2024. All other EAIC policies and claims were resolved through the 2011 scheme.
The ongoing run-off costs of these claims are eroding EAIC’s assets. The EAIC scheme administrators decided it was appropriate to pursue another scheme of arrangement to finalize EAIC’s liabilities regarding the Marsh Mac Claims. The scheme was voted on and approved by creditors in December and sanctioned by the High Court of Justice of England on January 25, 2024. The new scheme resolves only EAIC’s liabilities under the Marsh Mac Claims; Marsh & McLennan is not participating in the scheme. The scheme does not extinguish or remove Marsh & McLennan’s obligations under the letter of credit, but Marsh Mac Claims creditors must pursue their claims under the letter of credit directly with Marsh.
For more background on EAIC, please see the scheme documents and the scheme website.
Lumbermens Proposes First Dividend
The liquidator for Lumbermens Mutual Casualty Company announced “Good Faith Estimate” for the issuance of a 15% first interim dividend to class D priority level policyholders. The dividend is subject to court approval. If approved, the liquidator anticipates payments being made in the first quarter of 2024 for allowed claims with completed paperwork.
Lumbermens and its affiliates American Manufacturers Mutual Insurance Company and American Motorists Insurance Company entered voluntary run-off in 2003, placed in rehabilitation in 2012, and ordered into liquidation in 2013 in Illinois. The proof of claim filing deadline was November 10, 2014 and the contingent claim filing deadline was November 10, 2017. For more information, please see the Illinois Office of the Special Deputy Receiver’s Lumbermens website.
Stronghold Dividend Update
In August of 2023, scheme administrators announced an initial 25% dividend on agreed claims and anticipated making a final dividend payment by the close of the year. As some claims remain outstanding, that final dividend was not declared or paid out in 2023. Further updates on progress and dividends should be released by the end of February 2024.
Stronghold has been in run-off since 1985 and was declared insolvent and placed in administration on June 27, 2019, following a failed solvent scheme of arrangement bid. All business included in the Direct Scheme was written under the Stronghold name. The final claims bar date was August 10, 2021. For more information, please see PWC’s Stronghold website.
Arrowood Liquidation and Bar Date
As previously reported, Arrowood Indemnity Company was declared insolvent and ordered into liquidation in Delaware on November 8, 2023. Creditors wishing to preserve their claims against Arrowood must file their proof of claim forms by January 15, 2025. Please note that the forms must be notarized.
We have written extensively on our Risky Business blog about Arrowood’s decline and the impact of the 2007 transaction that divested Royal Indemnity Company and its US-based affiliates via a management buyout. For more information on the liquidation proceedings, including a copy of the proof of claim form, please see the Delaware Department of Insurance’s Arrowood Liquidation website.
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Nick Sochurek has extensive experience in leading complex insurance policy reviews and analysis for a variety of corporate policyholders using relational database technology.Learn More About Nicholas