Both scheme creditors meetings will be held remotely on February 2, 2021, with the Direct Scheme Creditors meeting at 10AM GMT/5AM EST and the General Scheme Creditors meeting at 11AM GMT/6AM EST. Participants may join either by videoconference or by teleconference. Scheme creditors of either kind are asked to complete and return a voting and proxy form by 5PM GMT/12PM EST on February 1. If the schemes are approved by voters, the final claims bar date is estimated to be early-to-mid August.
The dual-scheme approach is a novel one. Insureds with policies issued directly by Stronghold (or assumed by Stronghold) will be classified as Direct Scheme Creditors. General Scheme Creditors include all other creditors, including reinsurance and retrocession contracts. Both schemes will have a final claims submission deadline of 180 days after they become effective, but General Scheme Creditors will only be paid after all Direct Scheme Creditor claims are agreed and paid in full. The Direct Scheme will proceed if it is approved by creditors, but the General Scheme, even if approved by creditors, will proceed only if the Direct Scheme is also approved.
Stronghold has been in run-off since 1985. Since 2016, it has failed to meet the Solvency II capital requirements. A solvent scheme of arrangement was proposed in 2018, but the creditors’ meeting was adjourned without result due to creditor opposition. Subsequently, Stronghold was declared insolvent and placed in administration on June 27, 2019. A hearing was set for July 2020 to grant Stronghold permission to hold a creditors’ vote meeting but was postponed until December 2020 because of the COVID-19 global pandemic.
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Nick Sochurek has extensive experience in leading complex insurance policy reviews and analysis for a variety of corporate policyholders using relational database technology.Learn More About Nicholas