AMICO DISPUTES CASH HOLDINGS IN MANHATTAN RE REHABILITATION
In response to a rehabilitation plan for Delaware insurance company Manhattan Re proposed by its receiver, American Motorists Insurance Company (a reinsurer of Manhattan Re) filed objections with the Delaware Court of Chancery. AMICO argued that the plan should be rejected because the receiver improperly intended to dispose of certain cash holdings that AMICO claimed constituted cash collateral under its reinsurance agreements with the company. Additionally, AMICO moved to have the parties’ dispute referred to arbitration, and for a preliminary injunction to preserve the disputed cash until arbitration is resolved. The court found that Delaware law permits enforcement of the arbitration clause in the reinsurance agreement which compelled the parties to arbitrate their dispute over the cash. Additionally, the court issued a partial stay of the proceedings pending resolution of the arbitration. In re Rehabilitation of Manhattan Reinsurance Co., No. 2844 (Del. Ct. Ch. Oct. 4, 2011).
This post written by John Black.
