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Most Lloyd’s investors here quit fight, accept settlement

A significant number of the 19 Rochester Lloyd’s of London syndicate members who sued the troubled British insurance group have thrown in the towel.
For now, the state Supreme Court suit remains viable, said John LaFave of Fix, Spindelman, Brovitz, Turk, Himelein & Shukoff. But others may yet abandon the action.
The Rochester action against Lloyd’s ran parallel to a federal suit filed in Virginia that also sought to end liabilities for so-called Lloyd’s “names.” Names buy into syndicates that underwrite Lloyd’s policies.
Both seek to kill the insurance group’s proposed $4.7 billion settlement with 2,700 Lloyd’s names in the United States.
A 300-year-old group of insurance companies, Lloyd’s in the late 1980s suffered losses on its own investments at the same time as it was hit with obligations to make huge payouts on policies. As a result, it demanded large sums from names who had pledged their own assets to buy into syndicates.
On Tuesday, a federal appeals court judge threw out an earlier order in the Virginia case that would have halted the proposal by Lloyd’s to have American names help re-insure billions of dollars in Lloyd’s liabilities under a new firm to be called Equitas.
Earlier, a state Supreme Court justice in Rochester had issued an order blocking Lloyd’s from taking the Rochester litigants’ assets.
LaFave said the effect of the federal decision on New York courts is not yet clear, but the New York order still appears to be in effect.
Regardless, he said, more than half of the Rochester 19 did what some 90 percent of American names had done by Wednesday–agreed to Lloyd’s settlement terms.
The New York and federal actions maintain that Lloyd’s sold syndicate memberships here improperly by not registering them as securities.
The federal appeals court did not deal with legal merits of the case, but said that American names had to honor their agreement to sue the company in British courts.

Most Lloyd’s investors here quit fight, accept settlement

A significant number of the 19 Rochester Lloyd’s of London syndicate members who sued the troubled British insurance group have thrown in the towel.
For now, the state Supreme Court suit remains viable, said John LaFave of Fix, Spindelman, Brovitz, Turk, Himelein & Shukoff.

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