Trenwick America's creditors ask for permission to trade securities

By Carlise Newman

Chicago, Oct. 27 - Trenwick America Corp.'s official committee of unsecured creditors have filed a motion in court asking permission to allow securities trading of company stock in certain circumstances.

The committee seeks authority to publish information surrounding the company's stock, notes, and bonds, and also seeks an order determining that committee members do not violate their fiduciary duties.

Committee members trading company securities will establish an information barrier so that they will not misuse non-public information.

One of the trading members researches and publishes information regarding securities and trades securities, including those of Trenwick, but does not manage client accounts and does not owe a fudiciary duty to its clients. However the member does have a fiduciary duty to the committee and unsecured creditors and therefore must decide whether to remain on the committee and forgo those activities, or remove itself from the committee, according to the court filing.

The committee has requested that the court not prevent the trading and selling members from continuing their normal business operations, as it would force them to either forfeit a business opportunity, or forego the opportunity to help guide the reorganization of Trenwick.

Trenwick is a Bermuda-based specialty insurance and reinsurance underwriting organization. Its Chapter 11 case is in the U.S. Bankruptcy Court for the District of Delaware.

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