We negotiated recovery of hundreds of millions of dollars in directors and officers insurance proceeds to fund settlements of securities class action claims asserted against a Fortune 500 company.  In doing so, we overcame insurer objections that the underlying securities settlements were not covered, should be related to earlier claims and paid by other policies, and were excluded based on their alleged connection to one of the largest corporate plea agreements in U.S. history.

Working with insurance liquidation officials in London, which hosts a massive insurance marketplace covering U.S. and worldwide risks, our lawyers developed new protocols under existing U.K. statutes to ensure that reinsurance assets in insurer liquidation proceedings were recovered efficiently and were then equably distributed to policyholders.  The first such “scheme of arrangement” in 1993 was drafted for five related insurers known collectively as the KWELM companies, which insured more than $5 billion in anticipated claims.  The KWELM scheme of arrangement proved to be very successful and ultimately paid significant percentages of agreed claims up to 90% plus.  The KWELM template also established a creditors committee that included representatives of U.S. policyholders to ensure that U.S. policyholders’ interests were considered.  The scheme of arrangement protocols developed for KWELM formed the basis for a number of similar insurer insolvencies, including some that are still making payments to policyholders to this day.

We designed, negotiated, and implemented a prepackaged plan of reorganization under which the client contributed its insurance rights and proceeds to a trust to pay asbestos claims and the client’s asbestos-related bodily injury liabilities were discharged.  We settled more than a quarter of a billion dollars of insurance coverage to fund the trust, and subsequently settled the remaining coverage that had been transferred to the trust.  Our client emerged from the reorganization case free of asbestos liabilities and today is a successful and growing company.