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Bermuda-registered AlphaStar Insurance Group Ltd. - formerly Stirling Cooke Brown - and 11 of its subsidiaries, have applied for Chapter 11 bankruptcy protection in New York.
According to the the electronic newsletter, KYC News, the group is seeking breathing room while it seeks buyers for its assets, including its New York-based policy-issuing subsidiary Realm National Insurance Company, for which AlphaStar “is no longer able to provide capital”.
However, the article said that in a move “which is likely to enrage its creditors”, AlphaStar's two remaining directors approved massive bonuses for themselves and two other officers on the same day the petitions were filed.
The article, which was sent out by e-mail, said that despite their firm's “chronic financial condition” and “potential liabilities totalling hundreds of millions of dollars” after the loss of a fraud lawsuit in the UK earlier this year, Stephen Crane and Len Quick authorised bonus payments totalling $1.6 million to “encourage” the four to stay on during the bankruptcy proceedings.
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