The liquidators of an insolvent insurance business have announced an initial payment percentage of 15% has been agreed, following implementation of a Scheme of Arrangement (SoA).
Highlands Insurance Company (UK) Limited entered administration in November 2007, after directors agreed the company was insolvent. In April 2012, the company moved from administration to a Company Voluntary Liquidation (CVL).
A separate scheme of arrangement for reinsurance creditors, known as the Cedant Scheme, came into effect in September 2011 following the successful implementation of a scheme of arrangement which dealt with Highland UK’s direct insurance business.
All submitted claims had been paid in full under this first scheme of arrangement.
Joint scheme administrators and joint liquidators Dan Scwarzmann and Mark Batten of PwC announced that, following agreement of all claims submitted under the Cedant Scheme, an initial payment percentage of 15% had been set.
Schwarzmann, joint liquidator, scheme administrator and partner at PwC, said: “This announcement represents a significant milestone in the company’s closure plan, which is now substantially complete.
“Payments will be made to Cedant Scheme Creditors in the next few days. Further payments are dependent on additional reinsurance recoveries which are subject to significant uncertainties.
“The Highlands UK insolvency has again demonstrated that schemes of arrangement are a flexible exit tool for an insurance business.”
The ultimate parent company of Highlands UK is Highlands Insurance Group Inc., incorporated in the USA which, since October 2002 has, together with several subsidiaries, been subject to bankruptcy proceedings in Delaware, USA.