Lloyd's appeals over US ruling

Insurance market fights last-minute challenge to its pounds 15bn surviv al plan

Lloyd's of London yesterday lodged an urgent appeal against a landmark decision by a US federal judge, granting 2,700 US names an injunction to delay the insurance market's pounds 15bn survival plan.

The courtroom drama, in Richmond, Virginia, early yesterday morning, came as the final deadline looms for Lloyd's members to accept the market's Equitas package.

Names, as members are known, have until noon on Wednesday to accept the deal or face being excluded and pursued by Lloyd's for their debts.

This weekend, Lloyd's said the deadline would stand, regardless of the US decision. "Basically, we go ahead with the 28th August. People do have to be aware of the consequences of staying out," a Lloyd's spokeman warn- ed.

In his 11th-hour move, federal judge Robert Payne granted a preliminary injunction to US names that went far beyond their expectations.

In a 141-page decision, the judge ruled for the first time that Lloyd's was subject to US securities laws and ordered the market to provide full prospectus information, which it has so far declined, on Equitas.

He set Lloyd's a deadline of 23 September to comply, until when payments by any US names wishing to accept Equitas will be suspended in an "escrow fund".

The appeal will be heard early next week, and Lloyd's said it would pursue the case to the Supreme Court, if need be. So far Lloyd's has ridden a wave of court actions over pounds 8bn of losses suffered by its 33,500 names on catastrophe, pollution and asbestosis claims between 1987 and 1992.

UK names have won a series of actions against Lloyd's agents and auditors, which pushed the market into including a pounds 3.2bn settlement package in Equitas.

Only last month, it also thought it had bought off US state securities regulators by offering an extra pounds 40m to US names.

So far, too, the powerful federal Securities and Exchange Commission has sat on the fence, a stance US names last night said may have provoked the judge.

"Lloyd's is in violation of the Securities Exchange Act and ... in contravention of rules and regulations promulgated by the SEC," judge Payne said. His ruling came as Colorado's Attorney General also prepared to overrule the state's securities commission by taking action against Lloyd's under consumer protection laws.

The key New York prosecutor's office, however, said it had no plans to take action, despite Attorney General Dennis Vacco's intervention in Virginia, supporting US names' rights to sue in US rather than UK courts.

Lloyd's is hoping for up to pounds 320m in fresh money - pounds 66m from the US - from names, before it seeks final approval for Equitas from the Department of Trade and Industry after its ruling council meeting on Thursday. Yesterday, it said acceptances already exceeded expectations.

It intends to draw down on pounds 900m of names' funds at Lloyd's regardless, though pounds 100m of that belongs to US members and is now in doubt. As a contingency, it has already agreed a pounds 300m bank facility to the bridge any gap. A key part of the settlement, though, rests on getting enough of the 13,600 litigating names to stop court action.

This weekend, one US lawyer said the Virginia ruling might yet cause auditors, agents and broker with US activities to review their contributions to the deal.

PROMOTED VIDEO
Life and Style
Sainsbury's could roll the lorries out across its whole fleet if they are successful
tech
Arts and Entertainment
tv
Sport
Ojo Onaolapo celebrates winning the bronze medal
commonwealth games
Arts and Entertainment
Rock band Led Zeppelin in the early 1970s
musicLed Zeppelin to release alternative Stairway To Heaven after 43 years
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmHe was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
Arts and Entertainment
'Old Fashioned' will be a different kind of love story to '50 Shades'
film
Life and Style
fashionHealth concerns and 'pornified' perceptions have made women more conscious at the beach
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
Tracey Emin's 'My Bed' is returning to the Tate more than 15 years after it first caused shockwaves at the gallery
artTracey Emin's bed returns to the Tate after record sale
Arts and Entertainment
Smart mover: Peter Bazalgette
filmHow live cinema screenings can boost arts audiences
Environment
Neil Young performing at Hyde Park, London, earlier this month
environment
News
i100
News
Prince Harry is clearing enjoying the Commonwealth Games judging by this photo
people(a real one this time)
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Project Manager (HR)- Bristol - Upto £400 p/day

£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...

Graduate / Trainee Recruitment Consultant - IT

£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...

HR Business Partner - Banking Finance - Brentwood - £45K

£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

PA / Team Secretary - Wimbledon

£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

Day In a Page

Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
How live cinema screenings can boost arts audiences

How live cinema screenings can boost arts audiences

Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
Shipping container hotels: Pop-up hotels filling a niche

Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
Native American headdresses are not fashion accessories

Feather dust-up

A Canadian festival has banned Native American headwear. Haven't we been here before?
Boris Johnson's war on diesel

Boris Johnson's war on diesel

11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
5 best waterproof cameras

Splash and flash: 5 best waterproof cameras

Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
Countries that don’t survey their tigers risk losing them altogether

Countries that don’t survey their tigers risk losing them

Jonathon Porritt sounds the alarm
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz
A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc