News
Scottish Lion ruling overturned
29 January 2010
The controversial opinion by Lord Glennie on the Scottish Lion scheme of arrangement has been overturned unanimously by the Scottish Court of Session. In particular, this judgment rejects the assertion that in a solvent scheme there should be a ‘problem’ requiring a solution.
 In reaching their judgment their Lordships confirmed that solvent schemes of arrangement should in principle be treated in the same manner as insolvent schemes when it comes to sanction. Furthermore, their Lordships acknowledged that the loss of a policyholder’s contractual rights in a solvent scheme of arrangement is not a reason to prevent a solvent scheme being sanctioned.
Dan Schwarzmann, partner at PricewaterhouseCoopers and scheme adviser to Scottish Lion, welcomed the decision: ‘I am obviously delighted with this outcome for our client and for the PwC team who have been at the forefront of developing solvent schemes of arrangement. The four day appeal hearing was the most extensive review of solvent schemes of arrangement to date and the clarity of the judgment is enormously pleasing. I am pleased with the certainty that this judgment brings to the insurance and non-insurance solvent scheme of arrangement market.’
Adds Schwarzmann: ‘I know that some solvent schemes of arrangement were being held up pending this decision. As always, we will continue to work with all stakeholders, including policyholders, to address any concerns they may have’.
The decision can be read in full here.
See also related articles:
Scottish Lion - the market gives its verdict
The Scottish Lion roars - the appeal decision analysed by Clifford Chance and PricewaterhouseCoopers
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