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of‐state indenture bond trustees from foreclosing on real estate projects in
which the insurer owned partnership interests or for which the insurer had
guaranteed debt. Even if the projects were not, technically, direct assets of the
insurer, they were partnership assets in which the insurer had a direct interest
and, because of the guarantees, foreclosure would trigger deficiency
judgments directly against the insurer.
As to jurisdiction, the non‐resident trustees had minimum contacts with the
insurer to subject the trustees to personal jurisdiction of the rehabilitation
proceeding.
New York
Ace Grain Co. v. Rhode Island Ins. Co., 107 F. Supp. 90 (S.D. N.Y. 1952), affirmed,
199 F. 2d 758. The court found that a proceeding appointing a receiver for an
insurance company for the purpose of preserving its assets and rehabilitating
the company was a "delinquency proceeding" within the meaning of the New
York insurance code and of an identical provision adopted by Rhode Island
even though the insurance company was not insolvent. Therefore, the court
granted the receiver's motion to dismiss attachment proceedings brought in
New York against the company on the basis that New York law prohibited the
maintenance of any proceeding in the nature of attachment of execution
against a delinquent insurer on its assets in pending delinquency proceedings
in New York or any other reciprocal state.
In the Matter of the Application of the People of New York for an Order re the
First Russian Ins. Co., 253 N.Y. 365, 171 N.E. 572 (1931). Before the insurance
commission was ordered to take possession of a foreign insurance
corporation's property, an assignee of a foreign creditor procured a warrant of
attachment on the corporation's trust assets deposited for the benefit of
domestic policyholders. After the insurance commissioner completed the
liquidation of domestic claims, there was a surplus. The attaching creditor was
entitled to payment of the attached amount with interest.
Martyne v. American Union Fire Ins. Co., 168 A.D. 380, 153 N.Y.S. 433 (1915),
affirmed, 216 N.Y. 110 N.E. 502. A creditor of an insolvent foreign insurance
company was not permitted to bring a suit of attachment against the insolvent
foreign insurer when the insurance commissioner had taken over the insurer's
assets.
Oklahoma
Oregon
Joplin Corp. v. State ex rel. Grimes, 570 P.2d 1161 (Okla. 1977). Where
delinquency proceedings against an insurer under the Uniform Insurers'
Liquidation Act were commenced by the insurance commissioner on April 4,
where a creditor took judgment against the insurer in Missouri on April 14,
where an order enjoining all persons from seeking or obtaining preferences or
attachments or other liens against the insurer was entered in Oklahoma on
April 16, and where the creditor's Missouri judgment was filed in Oklahoma on
April 18, the filing of the Missouri judgment did not create a lien in favor of the
creditor so as to make it a secured creditor for purposes of the Act.
Ezell v. Equity General Ins. Co., 219 F. Supp. 51 (D. Ore. 1962). The plaintiff
obtained a money judgment against a Florida insurer in an Arkansas court and
attempted to enforce it pursuant to a writ of execution issued from a federal
district court in Oregon, to make a general garnishment of credits and property
of the insurer within Oregon and in the hands of the Oregon ancillary receiver.
The insurer had also been declared insolvent and placed in receivership in its
domiciliary state, Florida. The court held that it was obliged to honor the
substantive law of Oregon, which prohibited garnishment or execution during
the pending of delinquency proceedings.