The loss estimates for Australia’s HIH continue to mount. Last May they appeared to have leveled off at around U.S.$2.1 billion, but new information released by the liquidators now show they could go as high as U.S. $2.8 billion.
HIH was formally placed into liquidation on Monday, and the new loss assessments by Tony McGrath and Alex Macintosh of KPMG, the two liquidators handling the company’s affairs, are based on their investigation. They estimate that it will take another year to work out what amounts creditors might receive, and that it it could be a decade before all the payments are made.
Still at issue are a number of claims in the U.S., including workers compensation claims in California and other states, against HIH’s U.S. subsidiaries. So far U.S. insurance regulators have balked at requests to release HIH funds under their control to the Australian liquidators They’ve said they will continue efforts to reach an agreement acceptable to all concerned, but, as HIH had over 200 subsidiaries in Australia and globally, they acknowledge that it will be a very complicated task.
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