U.S. Treasury gives green light to Russian default insurance payouts

WASHINGTON (Reuters) -The U.S. Treasury issued a special waiver on Friday to allow investors with insurance against a Russian default, known as Credit Default Swaps, to receive their payouts.

The normally straightforward process of CDS payouts was thrown into chaos in June when Washington said its sanctions on Russia represented a total ban on buying Moscow’s debt.

An investor who buys a CDS contract usually hands over the underlying bond to the bank or fund that sold them the CDS when a default happens. It traditionally involves an auction to determine the price, but under the sanctions that exchange effectively became illegal.

The license authorizes U.S. persons to purchase or receive Russian bonds starting two days before the announced date of the auction, and up to eight business days after the auction takes place.

The committee that sets the auction date has a scheduled meeting on Monday at 1300 GMT after having met three times this week.

“OFAC has issued two General Licenses (waivers) to help U.S. and other global investors more cleanly exit their exposures to Russia,” a Treasury spokesperson said, referring to the Office of Foreign Assets Control which enforces U.S. sanctions.

The move also authorizes financial

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July 30, 2022 by INSURANCE

AG Paxton Announces Forrest Brumbaugh as New Deputy AG for Legal Counsel

Texas Attorney General Ken Paxton today announced the appointment of D. Forrest Brumbaugh as Deputy Attorney General for Legal Counsel. Mr. Brumbaugh comes to the Office of the Attorney General of Texas with over 28 years of experience in the private sector. Forrest was named shareholder at one of Texas’s leading law firms, Winstead Sechrest & Minick less than seven years after graduating law school.  In 2004, he became a partner at Fulbright & Jaworski, now Norton Rose Fulbright, one of the 15 largest law firms in the world. 

“I have known Attorney General Ken Paxton and his values for over 30 years,” said Mr. Brumbaugh. “I am honored that Attorney General Paxton has given me the opportunity to serve as the Deputy Attorney General for Legal Counsel. I look forward to carrying out our common goals of serving Texans.” 

“I have always been impressed with Forrest’s intelligence and creative approach to solving complex issues,” said Attorney General Paxton.  “I am excited that he is bringing those skills to our Agency as we continue our fight to protect all Texans.” 

Mr. Brumbaugh’s private practice included corporate, securities, and mergers and acquisitions, including representing some of the world’s largest institutional

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July 30, 2022 by LAW

Plaintiffs’ attorney says 3M’s $1B fund to resolve earplug litigation inadequate

3M plans to resolve an epic legal battle over its military earplugs through bankruptcy court, but the company will face fierce opposition from plaintiffs.

In one of the largest U.S. mass tort cases ever, about 230,000 U.S. military members and veterans allege that Combat Arms earplugs — made by 3M subsidiary Aearo Technologies — were faulty, damaging their hearing.

Plaintiffs have already scored several victories in cases that have gone to trial, netting almost $300 million from jury verdicts. 3M announced Tuesday that it put its Aearo subsidiary into Chapter 11 bankruptcy protection and will set up a $1 billion trust fund to pay all claims.

“It’s really about us — 3M — stepping up to do right by veterans,” 3M CEO Mike Roman told stock analysts in a conference call Tuesday. “We believe litigating cases individually can take years if not decades.”

3M’s move was blasted by plaintiffs’ attorneys, who said 3M’s $1 billion settlement plan is “woefully” underfunded.

“3M’s bankruptcy maneuver is further proof that they value their profits and stock price more than the well-being of veterans who fought and served our country,” lead counsel Bryan Aylstock said in a statement. “We will challenge this bankruptcy filing

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July 29, 2022 by ATTORNEY

Your job and education could be determining your car insurance rate

I went online last week to get a car insurance quote from Mercury Insurance. I went through the process twice, once listing my occupation as engineer.

All the rest of the information was the same — my age, address, driving record, car make — but as an engineer, I was given a lower monthly rate: $247.88 instead of $262.88 and a potential yearly savings of $179.89.

My price comparison experiment was inspired by a petition filed July 18 by Consumer Watchdog, a taxpayer and consumer advocacy group, protesting Mercury Insurance Co.’s request to the California Department of Insurance to bump up its auto rates.

Mercury Insurance, a major car insurance provider in California, is asking to raise its rates on customers by 6.9%, or $131 million.

But a major factor that underlies Consumer Watchdog’s demand for a public hearing on the proposal is its claim that Mercury’s rates are not only “excessive” but “unfairly discriminatory.”

“It’s an issue that we have been fighting for many years to rectify in California where insurance companies have been illegally surcharging folks based on arbitrary job categories,” Consumer Watchdog Executive Director Carmen Balber told me.

In 1988, Californians passed Proposition 103,

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July 29, 2022 by INSURANCE

Chris Pettit spent $250K in the 40 days after filing bankruptcy

Ex-San Antonio attorney Christopher “Chris” Pettit, accused of stealing his clients’ money, spent more than $250,000 in the 40 days after he filed for bankruptcy.

The spending is detailed in court exhibits that are part of the Chapter 11 trustee’s motion seeking an order directing Pettit to show why he should not be held in contempt for withdrawing $125,000 from his retirement account after filing for bankruptcy June 1.

Pettit, 55, transferred the retirement money into checking and savings accounts at Martha’s Vineyard Bank in Massachusetts. The court exhibits show he spent just shy of $252,000 from those accounts from June 2 through July 11.

“It may be consistent with his pre-bankruptcy lifestyle,” said San Antonio attorney Martin Seidler, who represents creditors in the case.

Pettit listed $27.8 million in assets and $115.2 million in debts in his personal bankruptcy, one of the largest ever filed in San Antonio. His law firm also filed.

On ExpressNews.com: ‘A big no-no’: Ex-San Antonio attorney Chris Pettit allegedly took $125,000 from retirement account

The trustee — the court-appointed private attorney overseeing the assets — has said the retirement money should not be touched until the court rules it’s exempt from the bankruptcy estate.

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July 28, 2022 by ATTORNEY
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