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Commercial Law Keyed to Lopucki
In re Ocana
Facts
LARSA entered into reinsurance agreements with Hannover. The agreements required LARSA to pay Hannover if Hannover experienced heavy losses on certain insurance policies. Banco Cafetero issued a standby letter of credit to support LARSA’s obligation. LARSA filed for bankruptcy. Hannover brought suit against Banco Cafetero arguing that Banco Cafetero was required to pay on the letter of credit because LARSA had failed to pay pursuant to the reinsurance agreement. The bankruptcy court issued a stay of Hanover’s action against Banco Cafetero.
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