Security Capital Assurance Ltd - Current report filing (8-K)
June 12 2008 - 5:00AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 11, 2008
(June 10, 2008)
SECURITY CAPITAL ASSURANCE LTD
(Exact name of registrant as specified in its charter)
Bermuda
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001-32950
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Not applicable
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(State or other jurisdiction
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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of incorporation)
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A.S. Cooper Building, 26 Reid Street, 4
th
Floor, Hamilton, Bermuda HM 11
(Address of principal executive offices)
Registrants telephone number, including area code: (441) 279 7450
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))
Item 8.01 Other Events.
On June 10, 2008, the U.S. District Court for the Southern District of New York issued a ruling in favor of Merrill Lynch International (MLI) against XL Capital Assurance Inc. (XLCA), a wholly owned
subsidiary of Security Capital Assurance Ltd (SCA or the Company), granting MLIs motion for summary judgment, which was opposed by XLCA, in connection with MLIs complaint challenging the effectiveness of
XLCAs terminations of seven credit default swap contracts (the ML CDS Contracts). XLCA intends to continue to defend its legal position in this matter.
In response to the ruling, the Company issued a statement saying:
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[The] ruling in Merrill
Lynch's favor was decided without the benefit of XLCA being permitted
to complete discovery which cut short XLCAs opportunity to fully
investigate and support its claims. Although the Judge has not yet
issued his written opinion on the case, XLCA disagrees strongly with
[the] result, intends to continue defending its legal position, and
is evaluating its options for appeal.
As of March 31, 2008 SCAs
best estimate for anticipated claims for these contracts was $428.9
million up from $417.3 million in the fourth quarter of 2007.
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The
ruling has no effect on the Companys estimate of anticipated claims
that it disclosed in its financial statements filed in its Form 10-Q for
the quarterly period ended March 31, 2008 in regard to its contracts with
Merrill Lynch and, while certain factors may cause such estimated anticipated
claims to change in the future, the ruling is not one them. To date, there
has been no claim made under the ML CDS Contracts.
MLIs original complaint of March 19, 2008 challenged the effectiveness of XLCAs terminations of the ML CDS Contracts under which XLCA had agreed to make payments to MLI on the occurrence of certain credit
events pertaining to particular collateralized debt obligations of asset-backed securities. XLCA had issued the terminations on the basis of MLIs repudiation of certain contractual obligations under each of the ML CDS Contracts.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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SECURITY CAPITAL ASSURANCE LTD
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(Registrant)
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Date: June 11, 2008
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By:
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/s/ Michael Rego
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Name: Michael Rego
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Title: Executive Vice President
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