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ecover from the insolvent insurer directly. In the same appeal, the court
rejected the trust’s request that it be awarded attorney fees and expenses
because such an award would be punitive in nature in this context.
Missouri
New York
Lakin v. General American Mut. Holding Co., 55 S.W.3d 499 (Mo. App. W.D.,
2001). The rehabilitation court approved a plan of reorganization, approving the
sale of stock to MetLife, but the Director of Insurance and MetLife disputed the
closing date for the sale. The Missouri Court of Appeals held that a statutory
five‐day period for appealing a finding for the Director applied to Metlife, rather
than the longer, 30‐day statute in general appeals, and despite the fact that
MetLife was not a party to the receivership action.
In re Bond and Mortgage Guarantee Co., 243 A.D. 813, 278 N.Y.S. 352 (1935). An
order disapproving a plan promulgated by the insurance commissioner for
readjustment, modification and reorganization of the rights of the holders was
found by the court to be unwarranted where the proposed plan was
reasonable and equitable to the certificate holders, of whom ninety‐one
percent had consented and none of whom had objected, and where it was
doubtful that in the event of foreclosure it would realize a sum sufficient to
pay the certificate holders the amount of their investments.
In re New York Title & Mortgage Co., 171 Misc. 489, 12 N.Y.S.2d 214 (1939). A
plan for the reorganization of a title and mortgage company was to be
declared effective when the holders of not less than a majority in amount of all
allowable claims, as estimated by the insurance commissioner, assented to the
plan. Court approval was required for the plan to become effective. Such
approval would not be forthcoming unless there was a substantial basis for the
commissioner's estimates.
South Carolina
Texas
Thrower v. Kistler, 14 F. Supp. 217 (E.D. S.C. 1936). In a suit by a creditor of an
old surety company charging that new surety company had fraudulently
obtained all of the assets of its predecessor and should be held liable for its
debts, it was held that voluntary plan of rehabilitation, approved by New York
commissioner of insurance, whereby new company acquired all assets and
business of the old company that was in danger of forced liquidation was valid
and binding on old company's creditors, because the transfer of assets
promoted the interests of the creditors.
American Benefit Life Ins. v. Hill Country Life Ins. Co., 582 S.W.2d 227 (Tex. Civ.
App. 1979) writ ref. n.r.e. The sole stockholder of 100% of the insolvent
insurer's stock challenged the receiver's rejection of a plan of reinsurance. On
appeal, the court held that the decision of the receiver and the court regarding
the approval of the plan of rehabilitation was a discretionary one and would
only be set aside if an abuse of discretion were shown.
Stay of Proceedings
Second Circuit Ace Grain Co. v. Rhode Island Ins. Co., 107 F. Supp. 80 (S.D. N.Y.) affirmed, 199
F.2d 758 (2nd Cir. 1952). The court granted the receiver's motion for an order
dismissing supplementary proceedings and restraining all actions or
proceedings in the nature of attachment, garnishment or execution against an
insurer placed in receivership in Rhode Island.
Third Circuit General Glass Industries Corp. v. Monsour Medical Foundation, 973 F.2d 197
(3rd Cir 1992). Plaintiff, on behalf of its 300 workers, brought RICO, ERISA and