Creditor stalls over Walbrook refinancing

TRANSIT CASUALTY, a US insurance company which is a main creditor of Walbrook Insurance, is demanding more financial information before it will consider supporting a dollars 500m refinancing of the insolvent legal liability insurer.

Walbrook, part of the formerly quoted London United Investments, which is in administration, was recently forced to stop paying claims, having run up a balance sheet deficit of pounds 170m.

Walbrook proposes paying its main policyholders 40 per cent of the amount owed and converting the remaining liability into redeemable preference shares.

Transit complained that Walbrook had asked creditors for a preliminary response by the end of this week, although Walbrook will not file its 1991 financial returns until the end of the month.

Transit, itself in receivership, believes the issue of shares is covered by US securities legislation which typically require extensive financial disclosure. The receiver of the US insurer wants access to audited 1991 results, a pro forma balance sheet and various assurances.

Transit opposes Walbrook's plan and is seeking to appoint liquidators. It believes a quicker, cheaper and more remunerative solution to Walbrook's problems can be found by including it in the provisional liquidation of the Kelm group of companies.

These companies have similar creditors and did similar business with HS Weavers, the LUI underwriting agency.