On February 9, 2012 GTE RE submitted its Notice of Termination of the Commutation Plan to all of the former creditors of GTE RE as required by Part 9 of the Commutation Plan. (A copy of the Notice of Termination together with a copy of the Amended April 27, 2011 Implementation Order is set forth below.)
GTE RE sent the Notice of Termination because, on February 6, 2012, Hudson Insurance Company and Clearwater Insurance Company (the “Objecting Creditors”) withdrew their appeal to the Rhode Island Supreme Court from the April 25, 2011 Rhode Island Superior Court decision granting the Motion of GTE REinsurance Company Limited (“GTE RE”) to Confirm the Vote at the Meeting of Creditors and to Implement the Commutation Plan (the “Motion to Confirm and to Implement”). (On February 3, 2012 the Objecting Creditors dismissed all of their remaining objections to the Commutation Plan filed in the Rhode Island Superior Court.)
GTE RE began the Commutation Plan process in June 2010. At the November 30, 2010 Meeting of Creditors the Commutation Plan was approved by Creditors representing in excess of eighty seven percent (87%) by number and ninety seven percent (97%) by value of those present and voting.
On December 14, 2010 the Objecting Creditors filed their challenge to the implementation of the Commutation Plan, alleging that implementation of the Commutation Plan violated the Contracts Clause of the Rhode Island and United States Constitutions.
By its April 25, 2011 Decision, the Rhode Island Superior Court overruled, in its entirety, the Objecting Creditors’ challenge to the Commutation Plan. By Implementation Order entered on April 27, 2011, the Court set a Final Claims Submission Time of August 1, 2011, a claims agreement date of August 28, 2011 and a claim payment date of September 30, 2011.
On May 2, 2011, the Objecting Creditors filed a Notice of Appeal from the Court’s April 27, 2011 Implementation Order.
GTE RE agreed all properly and timely submitted claims by August 28, 2011 – including those submitted by the Objecting Creditors – and by September 30, 2011, paid all final, agreed claims, other than those submitted by the Objecting Creditors. (The Objecting Creditors’ final, agreed claims were paid prior to the date of the Notice of Termination.)
On December 7, 2011 the Objecting Creditors filed a Motion to Partially Vacate Decision and Order with Respect to Clearwater Insurance Company to Effectuate Settlement (“Motion to Partially Vacate”). In the Motion to Partially Vacate, the Objecting Creditors asked the Court to vacate its April 25, 2011 Decision and April 27, 2011 Implementation Order as to Clearwater Insurance Company only (but leave the April 25 Decision and April 27 implementation Order in place in all other respects).
The Objecting Creditors asserted that if the Motion to Partially Vacate were granted, the Objecting Creditors’ Agreed Claim in the GTE RE Commutation Plan could be satisfied, the Objecting Creditors’ Appeal could be dismissed and the GTE RE Commutation Plan could be concluded.
On January 4, 2012 the Court held a hearing on the Motion to Partially Vacate and issued a decision on January 12, 2012 granting the Motion to Partially Vacate. Copies of the January 12, 2012 Decision and the revised April 25 Decision are also available below.
Andrew Rothseid, principal of RunOff Re.Solve LLC, serves as Commutation Plan Advisor for GTE RE. Any questions relating to the terms and operation of the Commutation Plan should be directed to Andrew Rothseid at (610) 680 5938 or andrew.rothseid@runoffresolve.com