Investors Denied Priority Access to Reinsurance Proceeds

NEW YORK - A New York federal court properly dismissed a counterclaim brought by a group of investors seeking a constructive trust over proceeds from the settlement of reinsurance claims, the 2nd Circuit U.S. Court of Appeals has ruled, finding that the dismissal did not undermine circuit precedent. In Re: Ades and Berg Group Investors v. Breeden, No. 07-3464 (2nd Cir.).

In a Dec. 16 ruling, the appellate panel affirmed that the circumstances of the case do not warrant the creation of a constructive trust over the proceeds.

In February 1997, Richard C. Breeden, the Chapter 11 trustee for …