Kathryn Hobbs
Clyde & Co's investment in the insolvency market is already starting to pay off, with its latest instruction coming from Mike Jervis and Beth Rees at Grant Thornton. A team led by Mark Fennessy has acted for Riverside Corporate Underwriters on its provisional liquidation.
Riverside, a corporate member at Lloyd's of London, is only the second such organisation in the history of Lloyd's to be placed in provisional liquidation. Prior to Riverside, Margent Communications had entered into similar territory. Precedents were therefore difficult to come by.
Since Riverside's insolvency, two other Lloyd's members have taken the same route, and a difficult insurance market could force others to follow suit.
When it started participating at Lloyd's, Riverside was involved with a number of Lloyd's syndicates, but poor underwriting years and significant projected losses did not bode well for the company. This year, it resolved to cease writing any new business at Lloyd's, and consequently entered into run-off.
The company tried to rationalise its activities, eventually focusing on just one syndicate at Lloyd's. However, the losses on this syndicate were such that the company had to enter into an insolvency procedure.
Along with Fennessy, the Clyde & Co team was led by David Salt (insurance) and assisted by Tom Skinner.
The firm worked in conjunction with the Council of Lloyd's, which oversees the running of the Lloyd's insurance market. In-house legal counsel Claire Schnader handled the Riverside matter with Kate Williams, who manages the business conduct review department.
Clyde & Co represented Riverside prior to its liquidation, so the insolvency instruction was a continuation of their relationship.
By ensuring that financial backing is still given to Riverside, the provisional liquidation of the company will secure any claims by policyholders who may otherwise have suffered significant losses. This temporary safe harbour would not have been possible had the company been placed in creditors' voluntary liquidation.
Fennessy said: "The provisional liquidation, which was put in place with the cooperation of the Council of Lloyd's, will provide a temporary safety net for Riverside. It will ensure that there is continuing financial support for the syndicates in which Riverside participated. This will safeguard the interests of Lloyd's policyholders, who may otherwise have faced financial uncertainty."
