Reinsurance assets will more easily be accessible to foreign liquidators in multinational insolvency proceedings following the House of Lords’ decision last week in the long-running HIH saga.
Their Lordships found that English courts should co-operate “as much as possible” to ensure that the assets of bankrupt companies based abroad are distributed among creditors under a single system.
HIH went under in 2001 with estimated debts of up to $5.3 billion.
The court ordered the English assets of several HIH companies–largely reinsurance contracts written in London–to be sent to Australia for distribution by liquidators.
The English courts should, according to their Lordships, cooperate with other jurisdictions unless the transfer of assets would prejudice the rights of international creditors. Accordingly, requests to transfer English assets to foreign liquidators are from now on likely to granted unless there is some good reason not to do so.
KPMG give a short precis of events, the issues and what it means in practical terms for HIH now (basically, not much).
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