Zurich Financial Settles Huge Bankruptcy Claim
NU Online News Service, Dec. 14, 3:44 p.m. EST?ZC Specialty Insurance Company, a Zurich Financial Services subsidiary, has settled a $728 million claim by a bankrupt nursing home chain for $47.5 million.[@@]
The agreement–which needs approval of the U.S. Bankruptcy Court for the Northern District of Texas in Dallas–follows a ruling this April that ZCSIC was a de facto partner of the Senior Living Properties nursing home chain. The appeal will now be dropped, Zurich Financial said.
Zurich Financial, in announcing the settlement with the trustee for the Senior Living bankruptcy, said ZCSIC does not admit liability.
According to the company, the settlement provides that the trustee will release ZCSIC and its affiliates from all claims arising form the nursing home business.
Additionally, the settlement will secure a permanent injunction from the bankruptcy court barring all creditors from suing ZCSIC for any claimed debts from a partnership with Senior Living.
ZCSIC became involved with Senior Living in 1998 when it provided a surety bond credit enhancement for the loan the group used to buy the nursing home chain. The group paid a number of premiums, including one where Zurich received 70 percent of Senior Livings' free cash-flow above $4 million.
According to Zurich, the initial suit sought $421 million in damages, with the figure later increased to $528 million plus costs and more than $200 million in contingent attorneys' fees.
ZCSIC is fully reserved for the settlement, Zurich said.
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