Victory for Lloyd's

BALTIMORE: The three-century-old house of Lloyd's got a reprieve Tuesday in a battle to save itself from insolvency. Lloyd's of London can go ahead with its $4.8 billion restructuring plan after the 4th U.S. Circuit Court of Appeals reversed a federal judge's ruling last Friday blocking the move. U.S. District Judge Robert Payne had issued a temporary injunction ordering Lloyd's to give some 3,000 U.S. investors an extra three months to review the settlement proposal. Payne said that American investors should have their cases tried in the U.S. courts and found evidence that Lloyd's was violating U.S securities law in trying to sell the settlement. The ruling came a day before a Wednesday deadline for a "substantial majority" of 'names', as investors in the house are called, to approve the restructuring program. If the plan had been blocked, Lloyd's would not have met its solvency test under British law. The restructuring deal, designed to help Lloyd's emerge from financial losses amounting to more than $12 billion, stipulates that "names" have to pay a premium of up to $150,000 and give up their right to sue Lloyd's or its agents for policies covered in the restructuring. The plan would put money-losing insurance policies into a new reinsurance company called Equitas Group, allowing individual investors to exit Lloyd's and limit their losses. "The only problem," says TIME's Helen Gibson. "Is that if the restructuring plan doesn't work, the names can't walk away. They are still responsible for the losses." But the plan, if successful, would allow this venerable British institution to move forward. Terence Nelan