A US Judge has ruled that Coopers & Lybrand’s controversial liquidation of insurance company Emlico should be referred to the Massachusetts Supreme Court.
This throws into doubt a deal between Coopers and the local insurance commissioner to proceed with the liquidation.
The case will be watched closely by other insurance companies eager to restructure themselves in the face of massive liabilities.
The re-insurers, including Lloyd’s of London, believe the commissioner was duped by Emlico in order for the company to benefit from Bermuda’s lax insolvency laws. The re-insurers said they were pleased that ‘the re-insurers will finally have their day in court’.
A spokesman for Coopers said: ‘We are disappointed Justice Greaney didn’t rule on the settlement agreement. However, we are confident that this matter will ultimately reach a resolution favourable to the estate of Emlico.’