Del. Judge Orders Arbitration of LOC Dispute Between Receiver and Creditor

WILMINGTON, Del. - A Delaware state court judge has ordered the rehabilitator of Manhattan Re-Insurance Co. to arbitrate a dispute over letter of credit proceeds, ruling that the receiver, by stepping into the shoes of the insurer, is bound by the arbitration agreement in the reinsurance contracts at issue. In the Matter of the Rehabilitation of Manhattan Re-Insurance Co., No. 2844-VCP (Del. Chanc. Ct.).

On Oct. 4, Vice Chancellor Donald F. Parsons Jr. of the Delaware Chancery Court ruled that under Delaware law, the rehabilitation court does not have exclusive jurisdiction over in personam claims like the one in this …