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net worth for casualty risk reinsurers are not as firmly determinable as other financial line


Likewise, as to defendants PriceWaterhouseCoopers and Ernst & Young, the

complaint fails to plead any specifics regarding the deficiency in the accounting and

valuation work that they performed. The Litigation Trust does not identify a single

violation of generally accepting accounting principles or any other specific material

misstatement of financial fact in the relevant financial statements. All that the complaint

alleges is that the financial statements were false in some unspecified way and that these

defendants participated with Trenwick in manipulating them and in facilitating

Trenwick’s acquisition strategy. The reason this must be so, the complaint infers, is that

in August 2003, Trenwick and Trenwick America became insolvent.

As to Baker & McKenzie, the complaint is, admittedly, more specific. The

complaint alleges that the law firm gave an erroneous opinion that a transfer of assets

from Trenwick to Chartwell complied with the requirement that Trenwick transfer

substantially all of its assets to an entity that would assume the obligations of those

indentures. The reason that advice was given was to protect Trenwick against a claim

under an indenture governing particular notes, not to protect Trenwick America. What



, 945 F.2d 1226, 1231 (2d

Cir. 1991) (“Consequently, regardless of the actuarial method used, the preparation of, and

reliance upon a net worth calculation in a balance sheet for a casualty risk reinsurer is based in large part upon informed guesswork. One cannot, therefore, expect equivalent certainty in a balance sheet’s statement of loss reserves and its statement of more determinable items, such as

outstanding principal and interest on debt instruments.”);

, 912 S.W.2d 30, 32 (Ky. 1995) (“The law turns a blind eye towards attempts to restate the financial condition of a corporation once that condition has already been lawfully determined.”).


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