Report Reliance Creditors-PA Insurance Dept. Agree to Even Asset Split

May 13, 2003

A report, which first appeared in the Philadelphia Inquirer, and was subsequently republished by Dow Jones, indicates that Pennsylvania regulators have reached an agreement with the other creditors over the division of the assets of the Reliance Group, which was forced into bankruptcy in June of 2001.

The Group, formerly headed by flamboyant corporate raider Saul Steinberg, collapsed from an overload of debt, and was placed under the control of the PA Insurance Department. According to the reports the regulators handling the group’s administration have reached an agreement with other creditors to split the group’s assets more or less 50-50, and will present their proposals today before U.S. Bankruptcy Judge Arthur Gonzalez in New York today. Both J.P. Morgan Chase and financier Carl Icahn have claims for debt repayments against Reliance.

A number of lawsuits have been filed against Steinberg and other officers and executives alleging mismanagement in running the various companies that comprised the Reliance group. The settlement between the regulators and the creditors would not affect these actions, which could result in significant additional payments. According to the report the company had at least $150 million in D&O coverage on its executives from Lloyd’s.

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