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and without assets in trust in Florida, could not be placed into liquidation in
Florida.
Provident Capital Indemnity, Ltd. v. Florida (ex rel. Dep’t of Ins.), 677 So. 2d
363 (Fla. App. 1996). Although an alien insurer, which is not authorized to
transact business anywhere in the United States and had no assets in trust in
Florida, was not subject to liquidation in that state, it could be placed in
conservation in such state.
New York
In re Norske Lloyd Ins. Co., 242 N.Y. 148, 151 N.E. 159 (1926). The court held that
domestic creditors holding policies issued in foreign countries were entitled to
prove their claims in the U.S. The policies were small and the policyholders
could not bear the expense of foreign travel and the costs of adjudication
abroad.
In Re Petition of Joint Provisional Liquidators of North Atlantic Insurance
Company Limited, 229 B.R. 90 (S.D.N.Y. 1999). In this ancillary proceeding
commenced pursuant to 11 U.S.C. § 304 (Bankruptcy Code), the provisional
liquidators sought a declaratory judgment that the debtor, North Atlantic
Insurance Company Limited, was entitled to interest income from two
trusts. Northwestern National Insurance Company counterclaimed for
damages and sought punitive damages on the ground that North American
fraudulently withdrew $16 million from the trusts. Northwestern also
commenced a separate RICO action against North American, based on the
same allegations. The provisional liquidators moved to dismiss the
counterclaims and the RICO action. Northwestern argued that it should be
permitted to defend itself by means of a counterclaim, and that England,
where the original North Atlantic insolvency proceeding was pending, had
no action equivalent to a RICO action.
The court observed that a proceeding brought pursuant to 11 U.S.C. § 304 is
not a full‐scale bankruptcy proceeding, but is a limited one, designed to aid a
proceeding in a foreign court. A primary purpose of a § 304 proceeding is to
prevent actions in the United States that would not be permitted in the
foreign country where the insolvency proceeding originated. The court
found the counterclaims and the RICO action violative of the injunction that
had been issued at the outset of the § 304 proceeding that enjoined the
commencement or continuation of any action or arbitration against North
Atlantic in the United States. The counterclaims and the RICO action were
dismissed with leave to bring them in the insolvency proceeding pending in
England.
In Re Pinhas Rubin and Joseph Halevy, as Liquidators of The Israel
Reinsurance Company, Ltd., 160 B.R. 269 (S.D.N.Y. 1993). The liquidators of
an insolvent Israeli insurance company moved pursuant to 11 U.S.C. § 304
(Bankruptcy Code) to enjoin the commencement or continuation of all
further actions against Israel Re in any U.S. jurisdiction and to enjoin any
attachment, lien, judgment or other claim against Israel Re’s property. A key
issue in the case was the disposition of a $2 million trust fund that had been
established by Israel Re in a New York bank for the benefit of domestic
insurers. The liquidator of Integrity Insurance Company (“Integrity”), a
claimant, argued that the trust should not be made part of the estate of
Israel Re and should be placed beyond the reach of the Israeli liquidation
court. The Bankruptcy Court applied New York law to determine Israel Re’s
interest in the trust, and concluded that because Israel Re’s interest was
reversionary and not quantifiable, the court could not order the turnover of
the trust to the estate. The court, however, enjoined the continuation of
Integrity’s action that had led to an attachment of the trust and directed
Integrity to pursue its claim in the Israeli liquidation court. In the process, the