Gilbert + Tobin’s Restructuring and Insolvency team has advised McGrathNicol partners Kathy Sozou and Shaun Fraser on the successful implementation of a novel claims resolution scheme for general insurer Eric Insurance (Eric). The scheme, implemented via a deed of company arrangement (DOCA) executed on 19 September 2025, is a novel precedent for a distressed general insurer in Australia.
Eric entered voluntary administration in July 2025 following mounting complaint-handling costs and a winding up application brought by APRA. With over 77,000 active policyholders, the question before the Federal Court was whether Eric should be placed into liquidation (triggering the Commonwealth Government’s Financial Claims Scheme) or whether a DOCA could deliver a more efficient and cost-effective outcome for policyholders and creditors.
Drawing on actuarial support from Eric, the McGrathNicol and G+T teams designed a DOCA that preserved key protections of the Financial Claims Scheme while introducing a more streamlined process for assessing claims and distributing available funds. After consultation with APRA, ASIC, the Australian Financial Complaints Authority and securing the Court’s imprimatur, Eric’s creditors unanimously approved the proposal. The DOCA is estimated to deliver a materially better return to policyholders and creditors than a liquidation.
The G+T team was led by partner Orla McCoy, supported by special counsel Mikhail Glavac and lawyer Jing Zhang. For McGrathNicol, Kathy Sozou and Shaun Fraser were supported by director Chania Rodwell and senior manager Karen San. APRA was advised by Emanuel Poulos and Lucinda Blue of Ashurst.
Orla McCoy commented:
We are proud to have supported Kathy Sozou and Shaun Fraser in delivering a positive outcome for Eric’s stakeholders. This transaction demonstrates the value of innovative restructuring solutions in regulated industries and highlights the exceptional collaboration between our team and McGrathNicol.
