LONDON—Scottish Lion Insurance Co. plans to appeal a controversial ruling by a Scottish court that rejected the solvent company’s proposed runoff plan.
Dan Schwarzman, a partner in the London office of PricewaterhouseCoopers L.L.P. and scheme adviser to Scottish Lion, said Tuesday that the request to appeal will be made at a hearing set for Dec. 1.
In a ruling last month by Lord Angus Glennie the Scottish Court of Sessions declined to sanction the solvent scheme of arrangement, handing a victory to a group of U.S.-based policyholders opposing the plan.
Edinburgh-based Scottish Lion, which has been in runoff since 1994, had asked the court to sanction the plan, which would have enabled the solvent insurer to shed its liabilities and wind up the company.
Schemes of arrangement are U.K. court-approved mechanisms that have gained popularity as part of the insurance runoff and restructuring business, but the approach often is controversial for solvent insurers.
Typically, scheme advisers need the approval of at least 75% of creditors to proceed with the application for sanctioning and U.K. judges historically have ruled in favor of the plans. However, in a previous opinion in the case, Lord Glennie said he did not think schemes of arrangement should be sanctioned for solvent companies unless creditors cast a unanimous vote in favor of the proposals.
An attorney for the policyholders—including Goodrich Corp., ExxonMobil Corp., Textron Inc., ITT Corp. and Zapata Corp.—said previously that he was “very pleased” with the ruling.
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