LakeShore Global

Recovery Specialists

Insurance Litigation Support

Premium and Collateral Recovery

Has an insurance company drawn against collateral on a policy?
Unearned premiums and collateral under a casualty policy are assets of the estate.  Bankruptcy law affords remedies to recover these funds on behalf of the estate.
Call LakeShore Global to initiate a recovery action to recover deductible premiums and excess collateral. 

Environmental and Technical

LakeShore Global Recovery

Due to the high cost of insurance and medical care costs, most companies with an above average experience modifier (i.e. significant number of employees with jobs that have above average risk of injury) find the most affordable alternative to a fully insured casualty program is some variation of a high deductible or guaranteed loss sharing arrangement with the insurer.  If risk is properly managed and appropriate internal programs established, this can result in the least expensive overall casualty risk management program for the employer.  The types of programs will require the insured to put up a letter of credit, or pay very high, tax deductible unearned expense premiums that are front loaded over the risk period.  In almost all cases that a bankruptcy and certain types or restructuring occur, the insurer steps in and assumes the risk on outstanding claims exposure on a go forward basis.  For assuming that risk, the insurance company is entitled to recover losses from the estate, but nothing more.
Often the insurance company will conservatively estimate future anticipated losses to ensure collateral is sufficient to meet future expenditures on the policies.  It is understandable why the insurer would attempt to cover the exposure, but this is clearly in violation of the Federal Bankruptcy Code and is likely in violoation of the insurance contracts between the debtor and the insurer.
LakeShore Global has the expertise to recover these funds from the insurer on behalf of the estate.  For every bankruptcy engagement we are involved in, we perform a desktop analysis to assess the exposure and potential return to the estate.  We rarely see this being done as a regular practice, and this means a lower return to the estate.
We recommend that every bankruptcy case should entail an analysis of the insurance contracts as well as an anlaysis of the NOL.  These are two very large assets that quite often are overlooked by the estate. 
If you have an ongoing bankruptcy case, call us today to schedule a desktop analysis to determine your potential for recovery and meet your responsibility to the creditors to maximize the return to the estate.

Financial Management

Restructuring Advisory

LakeShore Global
Austin, Texas
The Verification Experts
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