Subject: November 2007 Update
Claim Confirmations: To be eligible for claim distributions, claimants must represent and warrant to the Liquidator and the Liquidation Court under penalties of perjury that they have not taken any action which has the legal effect of extinguishing Amwest’s liability for their claims, that they have not received any payment on their claims from third parties, or if they have received any partial payment or granted any partial release, they must disclose the dollar amount thereof. The Liquidator recently provided claim confirmations to all Policyholder (Class 3) claimants with claims greater than $1,000 and whose claims have either been approved by the Liquidation Court or which the Liquidator anticipates submitting for Court approval. No distributions will be made to claimants who do not complete, sign and return their claim confirmations, so they should do so as quickly as possible. Claimants having questions on the confirmation process or any other matter should contact Claimant Services. See this website at the tab “HOW TO REACH US” for contact information.
Claimant Address Changes: Some claim confirmations sent to the last known address of claimants have been returned undeliverable. Please keep Amwest informed of address changes. See this website at the tab “HOW TO REACH US” for contact information.
Dividend Estimate to Policyholder (Class 3) Claimants: As a result of continued progress in the liquidation, the Liquidator now estimates the general asset distribution to Policyholder (Class 3) claimants will be no less than 50%.
CLAIMANTS ARE AGAIN CAUTIONED THAT THERE ARE A NUMBER OF FACTORS THAT WILL AFFECT THE DISTRIBUTION OF GENERAL ASSETS, MANY OF WHICH ARE BEYOND THE LIQUIDATOR'S CONTROL. AS A RESULT, THE ULTIMATE DISTRIBUTION AMOUNT MAY VARY MATERIALLY, EITHER UPWARD OR DOWNWARD, FROM THE LIQUIDATOR'S ESTIMATES.
Subject: May
2007 Update
The Liquidator now estimates the general asset distribution to Policyholder (Class 3) Claimants will be approximately 40% - 50%.
The Liquidator's distribution estimates are based on the amount of general assets the Liquidator believes may ultimately be available for distribution to policyholder (Class 3) claimants. The estimates do not include assets (specific assets) which may be held for the benefit of some but not all claimants, such as bond collateral, principal recoveries and statutory deposits held in certain states. Dividend estimates have not yet been adjusted for specific assets. Some claimants have received and others will receive distributions in respect of specific assets, thereby reducing their claims against Amwest's general assets, but ultimately increasing the total amounts distributed to them in the liquidation. The effect of the specific assets could be substantial for some claimants. All distributions, whether specific or general, must be approved by the Liquidation Court.
There are also circumstances which may reduce or eliminate a claimant's distribution, even after a claim is approved, such as the claimant's recovery from or release of the bond principal. All claimants will be required to represent to the Liquidator that they have not received any such recoveries or made any such releases as a condition to receiving any distributions in the liquidation.
Some of the amounts on which general and specific distributions will be made will not be known until the end of the liquidation. Claimants are therefore advised that their claim amounts may be subject to modification.
NO INTERIM DISTRIBUTIONS ARE CONTEMPLATED AT THIS TIME. CLAIMANTS ARE CAUTIONED THAT THERE ARE A NUMBER OF FACTORS THAT WILL AFFECT THE DISTRIBUTION OF GENERAL ASSETS, MANY OF WHICH ARE BEYOND THE LIQUIDATOR'S CONTROL. AS A RESULT, THE ULTIMATE DISTRIBUTION AMOUNT MAY VARY MATERIALLY, EITHER UPWARD OR DOWNWARD, FROM THE LIQUIDATOR'S ESTIMATES.
CLAIMANTS ARE CAUTIONED THAT THERE ARE A NUMBER OF FACTORS THAT WILL AFFECT THE DISTRIBUTION OF GENERAL ASSETS, MANY OF WHICH ARE BEYOND THE LIQUIDATOR'S CONTROL. AS A RESULT, THE ULTIMATE DISTRIBUTION AMOUNT MAY VARY MATERIALLY, EITHER UPWARD OR DOWNWARD, FROM THE LIQUIDATOR'S ESTIMATES.
Subject: June
2005 Update
The Liquidator has received a number of requests for information on the progress of the liquidation of Amwest Surety Insurance Company (“Amwest”). Most of the questions involve the prospects for payment on claims and the time for the making of distributions on claims. The amount and timing of distributions is subject to several variables, some of which are outside of the Liquidator’s control. The Liquidator is diligently pursuing completion of those matters which are within his control.
The greatest number of claims are claims under policies, which have a statutory payment priority after administrative costs and certain employee claims. The Liquidator estimates, based on existing facts and circumstances, that there will be at least a twenty-five percent (25%) dividend paid on timely filed and approved policyholder claims. The Liquidator believes that no amounts will be available for payment on claims in statutory priorities which are subordinate to timely filed and approved policyholder claims.
The Liquidator will make claim distributions as soon as possible. It is impossible to predict with certainty when distributions will begin. Claimants should not expect final distributions until the latter part of 2006 at the earliest. The Liquidator intends to make at least one interim distribution.
Claim Priority: Claims are prioritized by the categories specified in the Nebraska Insurers Supervision, Rehabilitation and Liquidation Act (“Liquidation Act”) in effect on June 7, 2001, when Amwest was declared insolvent by the District Court of Lancaster County, Nebraska and was placed in liquidation. Claims in a higher class priority must be paid or reserved for in full before any claims in lower priority classifications can be paid. The largest number of claims are timely filed claims under policies (including bonds), which fall into Class 3, after Class 1 (claims of administration) and Class 2 (certain employee claims). Other claim priorities include claims of general creditors (Class 4), certain governmental claims (Class 5), late claims (Class 6), and certain claims of note holders and shareholders (Classes 7 and 8).
Claims Determinations: The Liquidation Court must approve all claims. The Liquidator makes a recommendation to the Liquidation Court as to the allowed amount of each undisputed claim. Disputed claims are determined by the Liquidation Court following a dispute resolution process involving a court-appointed referee. The Liquidation Court has thus far approved the Liquidator’s recommendation covering 2,268 undisputed Class 3 claims totaling more than $28 million. There are a number of substantial disputed claims that have not been resolved.
Asset Collection: The Liquidator is aggressively pursuing completion of lawsuits which have been instituted against third parties. The Liquidator believes he has a strong legal and factual basis for recovery in each case. As with any litigation, the ultimate result and timing of the completion of these cases is impossible to predict. While a successful conclusion to these cases would enhance the amounts available for claimants, the Liquidator cannot assure the claimants that he will prevail in any of these cases or reach satisfactory settlements.
Claim Assignments: The Liquidator has been contacted by third parties that purchase claims against insolvent companies. These firms purchase claims from claimants, sometimes at substantial discounts, based on their calculated expected ultimate distribution. These third parties have no connection with the Liquidator and they have no special knowledge or information from the Liquidator of the eventual outcome of Amwest’s liquidation. The Liquidator makes no recommendation that claimants do (or not do) business with these third parties.