Genworth Scores Novel Win Over Fraudulent Asset Transfer Claims

Genworth Financial Inc. dodged claims it manufactured the insolvency of several affiliates to avoid paying out on certain long-term care insurance policies, when a Delaware judge held in a novel ruling Tuesday that policyholders can challenge only the first round of asset transfers.

Vice Chancellor Joseph R. Slights III dismissed part of the case, denying a bid to preserve the solvency of Genworth affiliates up the corporate chain from an insurance unit that’s allegedly unable to meet its policy obligations after its parent company looted its assets and handed them out as dividends.

Slights, writing for Delaware’s Chancery Court, acknowledged ...