Several big creditors of failed Australian insurer HIH are pressing ahead with lawsuits in the U.S. aimed at stopping Tony McGrath, the KPMG partner appointed as provisional liquidator, from marshaling HIH’s U.S. assets to pay creditors outside of the U.S., principally in Australia.
McGrath’s plan to pool all of HIH’s global assets to pay off creditors pro rata has met vigorous opposition in the U.S., led by the Chase Manhattan Bank and the fishing group American Seafoods. They maintain that the U.S. assets should be used exclusively to satisfy the debts owed to U.S. creditors, which are estimated to be at least $100 million, and policyholders where the amount has yet to be determined. Chase alone claims it’s owed $90 million on film financing policies.
HIH’s worldwide assets are thought to be around $1 billion, $763 million of which are in the U.S., including a stake in New York’s St. Moritz Hotel. Attorneys for the U.S. creditors are reportedly studying the option of removing McGrath’s control over U.S. assets, and putting a local bankruptcy administrator in charge of them.
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