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in accepting an inadequate offer and thereby sacrificing assets to put a stop to
alleged losses.
In re National Surety Co., 248 A.D. 111, 288 N.Y.S. 1014 (1936). An order
disapproving the acceptance bid by the insurance commission of the highest
for the stock of a new surety company organized under a plan of rehabilitation
on the ground that the bid was inadequate and that acceptance of an
amended bid was in the best interests of the estate of the rehabilitated
company was improper under the insurance code.
In re New York Title Mortgage Company, 277 N.Y. 66, 13 N.E.2d 41 (1938). The
validity of any appraisal of mortgages or other securities entering into the
allowance of claims by holders of mortgage guaranties should be tested by
cross‐examination. A mortgage guaranty company went into liquidation.
There wee claims made by holders of the mortgage guarantees who had not
acquired the underlying realty. The court held that the "security," whose value
had to be deducted from the claim, was the mortgage as a mortgage, not the
realty.
In re New York Title & Mortgage Co., 257 A.D. 19, 11 N.Y.S.2d 828 (1939), motion
denied, 257 A.D. 822, 12 N.Y.S. 2d 1021, appeal dismissed, 281 N.Y. 829, 24 N.E.2d
491. A hearing to fix the valuation of mortgages was deemed essential
because of the following facts: The claims of the guaranty could not be settled
by the commissioner of insurance; the trustees appointed in reorganization
proceedings could not settle discreetly without determining the fair value of
their claims; the claims could not be allowed for a sum greater than the
difference between the value of their share of the security and the amount of
the guaranty.
In re New York Title & Mortgage Co., 21 N.Y.S.2d 575 (1940). A mortgage
guaranty company was ordered into liquidation with appraisals of the value of
mortgages and other securities entering into the allowance of claims by the
holders of mortgage guaranties and entered into evidence as an exhibit of the
policyholders. The court held that this was admissible against the holders and
the appointed trustees. The trier of fact could give the evidence as much
weight as it deemed advisable. Moreover, the referee was not required to
accept the opinions of any of the experts who appraised the mortgages and
other securities of a mortgage guaranty company in liquidation.
Claims Against Regulators
Louisiana
Brown v. ANA Ins. Group, 994 So. 2d 1265 (La. 2008). An insolvent insurance
company, ANA Insurance Group (“ANA”), was found to be a single business
enterprise with United States General Agency (“USGA”) and American Funding
Services, Inc. (“AFSI”), and was placed in receivership. A co‐owner of ANA sued
the commissioner of insurance, as liquidator, for mismanagement of the
receivership estate based on the liquidator’s conduct with respect to the sale of
securities owned by USGA. Overruling the lower appellate court’s reasoning
that a finding of a single business enterprise (“SBE”) makes the liquidator a
fiduciary to the co‐owner of ANA, as if she were an owner of the entire SBE, the
state supreme court held that an SBE makes the liquidator owner of all of the
SBE’s assets, but that the owners of the individual entities of the SBE remain the
same. Therefore, the co‐owner of ANA did not have standing to bring an action
against the liquidator of USGA.
Wooley v. Lucksinger, 961 So. 2d 1228 (La. Ct. App. 2007). Owner of an insolvent
health plan filed a third‐party claim against the Department of Insurance in the
same lawsuit where the Commissioner of Insurance, as liquidator of the same
insolvent health plan, was pursuing causes of action against the owner for