ABSTRACT
The ability of the PRA and Lloyd’s to apply for a reorganisation order does not prevent their agreeing other, more appropriate, measures to resolve the problem before applying for an order. For example, the Treasury envisaged that in such circumstances the opportunity for a restoration plan in accordance with the Life and Non-Life Directives would be examined. 8
28.6 A reorganisation order would appoint a “reorganisation controller” and bring into force a moratorium 9 on proceedings or other legal processes against “affected market participants” (defi ned as any member, former member, managing agent, members' agent, Lloyd’s broker, approved run-off company or coverholder to whom the Lloyd’s market reorganisation order applies), and to Lloyd’s and its subsidiaries. The application for the reorganisation order is to be made by a regulator under FSMA or Lloyd’s itself, or both, and is to designate the market participants to whom the order should apply; specifi c coverholders have to be expressly included rather than being automatically included as a class (unless expressly excluded) like other market participants. 10 The court can also make any additional order it thinks appropriate for the attainment of the objectives. 11
28.7 A reorganisation order can be framed or subsequently amended to exclude from the moratorium particular assets 12 or market participants 13 : this is to enable corporate members, managing agents and others to continue trading and meeting their liabilities where they have suffi cient assets to do so (with a view if necessary, in the event of a cessation of the Lloyd’s market, to their business being transferred as a going concern to related entities).
