Today, the Vermont Supreme Court issues its opinion in the Ambassador in Liquidation case striking down the estate’s previously-published 12/31/13 bar date for final Proofs of Claim. The Ambassador Ins. Co. liquidation has been in process since 1987.  After the estate obtained over $300,000,000 in reinsurance and settlement proceeds from its former auditing firm, the estate essentially became “solvent”—paying Priority Four claims at 100 percent (plus interest). Seeking to bring the estate to a close, the liquidator set a final Proof of Claim date of 12/31/13 to require claimant-insureds to settle their underlying claims and submit them to the Ambassador estate. Many of the insureds have long-tail liabilities which are still developing and could not be resolved by the 2103 bar date. NICO, successor to certain claims against the Ambassador estate, challenged the bar date and the VT Sup. Ct. today agreed with NICO and struck down the 12/31/13 bar date. This ruling allows Ambassador claimants to continue to submit claims as they come due in the normal course and leaves open the potential for IBNR claims to proceed in the future.

A copy of the decision is attached, which provides an excellent overview of the history of the Ambassador proceedings and an examination of the intricacies of long-tail liability insurance claims.”