Monday, Nov 19, 2007
Have it
Telegraph: Lloyd's braced for wave of credit crunch claims
Boom.
Lloyd's of London, the world's largest insurance market, is bracing itself for hundreds of claims from company directors as fears mount that the credit crisis will unleash a wave of lawsuits.
Sources said that up to 30 notifications had already been received. The chief executive of one syndicate said: "There is always going to be a delay before the insurers feel the pain. "
A fortnight ago, a class action lawsuit was filed in New York by investors who had bought shares in Citigroup, alleging the investment bank misled them by falsely reporting financial statements.
Posted by lvmreader @ 09:35 AM (452 views) Add Comment
7 Comments
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1. Uk Hater said...
FU UK you're dead!
2. techieman said...
This is quite normal - D&O / E&O claims - I think you will find that that insurers have been anticipating this stuff for some time. Will be interesting to see this develop whenever there are stock market falls the Yanks are sure to sue the Advisers and / or the Directors. Its just their physce. The last big hit for this market was Enron, Worldcom and IPO Laddering (all around 2001). I'd also be interested in Mortgage Indemnity claims, as and when these become an issue.
3. techieman said...
... as well as that these exposures are not solely insured by Lloyds or for that matter the London market, the overseas markets also include some hefty players. Both US and Asian insurers will be involved either directly as co-insurers with Lloyds (perhaps even leading) or via Reinsurance arrangements. The insureds themselves will probably have some pretty large retentions, so its not all doom and gloom for the UK in particular, notwithstanding UK hater's remark.
4. drewster said...
When the good times were rolling, companies across the board were lax on paperwork and accountability. Nobody bothered to hold them to account as long as the asset value was rising. Now that the bad times are coming, companies are having to dig up the old paperwork and re-check things. Arguments will fly between shareholders, directors, board members, and accountants, about who said what and why. The sloppy paperwork will be a key part of this. Three good examples of this:
From MoneyWeek:
From Reuters:
From the New York Times:
As the buy-to-let boom unravels in the UK, we can expect to see surveyors, estate agents, mortgage lenders, shoddy builders, and of course the likes of Inside Track and Assetz being hauled through court to explain their actions.
5. cornishman said...
@ drewster
"Subprime's paper trail proves to be an obstacle. A judge in Ohio threw out 14 foreclosure proceedings brought on behalf of Deutsche Bank last month, saying the company had not proved it legally owned the mortgage loans when it filed the foreclosure proceedings...
So many of these mortgages have been repeatedly chopped up into little pieces and passed on that repossessions will be a nightmare. If the banks can't even work out which of them has what for accounting purposes - how the hell are they going to know how many of them have a share in a particular defaulting mortgage - so that they can file proceedings?
6. Orwell said...
I anticipated this some time ago. It would seem that they have not learnt from the asbestosis debacle...
7. Borisina said...
"As the buy to let boom unravels in the UK, we can expect to see surveyors, estate agents, mortgage lenders, shoddy builders, and of course the likes of Inside Track and Assetz being hauled through court to explain their actions" Gee Whiz Drewster I hope you are right. These slippery types have more tricks up their sleeves than a barrel full of monkeys. It would be good if justice was at least seen to be done.