~.r F~t~~.D CHRISTOPHER S. PORRINO ATTORNEY GENERAL OF NEW JERSEY 0~ 211 Richard J. Hughes Justice Complex t~A~' C;C~Ur~~ 25 Market Street S~PERiUR ~'GEJ P.O. Box 117 MERC~~t VIC~ HANCE Y Trenton, New Jersey 08625 C Attorney for Plaintiff, Commissioner of the Department of Banking and Insurance
B y: William B. Puskas, Jr. Deputy Attorney General (609) 292-7669 [email protected] Attorney ID: 014901976
SUPERIOR COURT OF NEW JERSEY CHANCERY DIVISION-MERCER COUNTY DOCKET NO . MER-C- ~~ ~- ~~
RICHARD J. .BADOLATO, ) COMMISSIONER OF THE ) DEPARTMENT OF BANKING AND ) INSURANCE OF NEW JERSEY, )
Plaintiff, ) Civil Action v. )
IFA INSURANCE COMPANY, ) ORDER OF LIQUIDATION AND DECLARATION OF Defendant. ) INSOLVENCY i
This matter having been opened to the court by
Christopher S. Porrino, Attorney General of New Jersey, by
William B. Punkas, Jr., Deputy Attorney General, as attorney for
Richard J. Badolato, the Commissioner of the Department of
Banking and Insurance of .the State of New Jersey
("Commissioner"), on application for an Order to be entered: (a) declaring IFA Insurance Company ("IFA") to be insolvent; (b) directing the Commissioner to liquidate IFA; and (c} permanently enjoining all persons and entities from pursuing litigation against IFA or from interfering with the Commissioner's efforts
the to liquidate IFA, and the court having considered
Commissioner's application, the court hereby finds that:
1 . IFA is an insurance company domiciled in the
17 State of New Jersey and governed by the provisions of Title of the Statutes of New Jersey.
2. This court has general jurisdiction, pursuant to
N.J.S.A. 17:30C-1 et seq., over this proceeding.
3. The written and published notice of the Petition
the for Liquidation to interested persons evidenced by
the Certification and Notice filed with the court constitutes
the best notice practicable under the circumstances and meets
requirements of due process concerning such notice.
~ u i ~r,~ rrrr~~~r1~C PX~ ~ 1. urSl~C~pt t~ N. J. J . t~.
an Order 17:30C-6a, -6f, -6k and N.J.S.A. 17:30C-8 for entry of
Order of of Liquidation and Declaration of Insolvency, and such
OA-9. Liquidation should be entered pursuant to N.J.S.A. 17.
It is, therefore, on this day of
i /~' ~ L~ 2017, ORDERED:
Pursuant to N.J.S.A. 17:30C-1, et seq., IFA is
that deemed to be insolvent and is in such a financial condition
- 2 - hazardous to its its further transaction of business will be policyholders, to its creditors, and to the public. of 2. The Commissioner is appointed as Liquidator
or implied by IFA with all the power and authority expressed
to appoint and N.J.S.A. 17:30C-1, et seq., including the power
17:30C-17. recompense a Deputy Liquidator pursuant to N.J.S.A.
for his The Deputy Liquidator shall have no personal liability
duties as Deputy acts or omissions in connection with his
are undertaken Liquidator provided that such acts or omissions
misconduct, or or committed in good faith and without willful
intent. The willful, wanton, or gross negligence or criminal
of the Deputy Liquidator shall not be deemed to be an employee
subject to the State of New Jersey and accordingly shall not be
59:1-1 et provisions of the New Jersey Tort Claims Act, N.J.S.A.
Liquidator seq. All expenses and costs incurred by the Deputy
i~ l ~ ~n~ins~ hym yn ~lC nPr~Qn~~~. ~~naCltV in connecti~r~ wi ~1~ ~awsui ~s QI~C.L111 ~ ~~
the Commissioner shall, subject to the prior written approval of
and assets of IFA, and the court, be paid out of the funds
of any bad faith, provided that such lawsuits are not the result
actions on the willful misconduct, gross negligence, or criminal
part of the Deputy Liquidator.
to 3. The Commissioner is hereby vested with title
to any of IFA's all assets of IFA, including but not limited
bank accounts, contracts, causes of action, books, records,
- 3 - certificates of deposits, funds, securities or other funds and all real or personal property of any nature, including furniture, fixtures and office supplies, wherever located, including such property of IFA which may be discovered hereafter, and is hereby directed to take immediate and exclusive possession and control of same. The filing or recording of this Order with the Clerk of this court and with the recorder of deeds of the jurisdiction in which IFA's
of corporate administrative offices are located or, in the case real estate, with the recorder of deeds of the jurisdictions
where the properties are located, shall impart the same notice
as would be imparted by a deed, bill of sale, or other evidence
of title filed or recorded. Except as otherwise indicated
the elsewhere in this Order, and upon notice provided by
Liquidator, all agents and brokers and all other persons or
~ ,-. n r~- t~ n~ ~l^ (lli'1 ~1P~~~ f of entitles nolairig ~r ulia~,- ~ - arse ~~, or pr~p~~ ~y ~~
or IFA shall forthwith file an accounting of those funds, assets
property with the Liquidator and shall, within 10 days of the
over service of this Order, turn said funds, assets, or property
he tQ the Liquidator. The Liquidator shall take such actions as
may deem necessary and appropriate to protect and preserve IFA's
assets.
4. The Commissioner is directed to liquidate IFA.
- 4 - 5. The Commissioner shall deal with the property and
Liquidator business of IFA in his own name as Commissioner or as in the name of IFA.
6. All persons and entities shall be permanently
or from enjoined from pursuing litigation against IFA
IFA. interfering with the Commissioner's efforts to liquidate
7. There shall be no further payments of claims by
or of this IFA except at the directive of the Commissioner court.
8. All claims against IFA must be asserted not later
in the than 180 days from the date of the Order of Liquidation,
will be form established by the Commissioner, or such claims forever barred.
9. The Commissioner as Liquidator shall establish
procedures governing the payment of claims by IFA.
10. All secured creditors or parties 11~I1l1U1U~L5~
priority collateral holders or other persons claiming secured,
of IFA, or preferred interests in any property or assets
including any governmental, entity, are hereby permanently
sell, enjoined from taking any steps whatsoever to transfer,
in or encumber, attach, dispose of or exercise purported rights
against any property or assets of IFA.
11. All officers, directors, trustees, shareholders,
all other policyholders, agents, and employees of IFA and
- 5 - not limited to any nature, including but persons or entities of and any plaintiffs, petitioners claimants, reinsurers, against IFA, having claims of any nature governmental agencies party claims, are counterclaims and third including crossclaims, from: hereby enjoined and restrained or phase of the business (a) Conducting any portion designee; by the Liquidator or his of IFA unless so authorized against IFA, including (b) Pursuing litigation action at law or further prosecuting any bringing, maintaining against IFA special, or other proceeding or equity, arbitration, office as and his successors in or against the Commissioner appointed against the Deputy Liquidator Liquidator thereof, or
2 above; pursuant to Paragraph of any levy upon the property (c) Making or executing
I FA ; or further presenting (d) Instituting, ~«aintaining or any or any collection activity, any suit at law or equity policyholder or any nature against any other proceeding of or financial from IFA's insolvency insured of IFA resulting or to meet any of IFA to pay any claim condition or the failure insolvency or obligations due to its of its contractual
financial impairment; or way with the Liquidator, (e) Interfering in any title to the in his possession of or any successors in office,
- 6 - duties or in the discharge of his property and assets of IFA,
persons or entities of any nature, pursuant to this Order. All
are hereby restrained from other than the Liquidator, or further prosecuting any direct commencing, maintaining or and reinsurer of IFA or its direct indirect actions against any
for proceeds of reinsurance indirect insurance subsidiaries
or other agreements with IFA. policies issued to and treaties directors, policyholders, 12. IFA, its officers, of any all other persons or entities agents and employees, and or or records belonging to IFA, nature, having any property
of IFA, including data processing pertaining to the business to any kind, are hereby directed information and records of such to the Liquidator all of assign, transfer and deliver
the same may be, and any persons, property in whatever name
any books, papers or records firms or corporations having
of IFA or its direct and indirect relating to the bus~liess these preserve the same and submit insurance subsidiaries shall
at all reasonable times. to the Liquidator for examination the power: 13. The Liquidator shall have
of IFA under the (a) to conduct the business
court; general supervision of the of administration, all (b) to honor, as expenses
by the Commissioner as expenses heretofore incurred
- ~ - designees and appointees, Administrative Supervisor, or by his
which currently remain unpaid; of IFA or (c) to pay from the funds or assets
available to him all from such other funds that may become
possession of, conserving, expenses of marshaling, taking
of or otherwise dealing with conducting, liquidating, disposing
the business and property of IFA; due and (d) to collect all debts and monies
located, where economically claims belonging to IFA, wherever
feasible and for this purpose: actions in (i) to institute and maintain timely
forestall other jurisdictions, in order to
against garnishment and attachment proceedings
such debts;
or (ii) to do such other acts as are necessary
or expedient to l~~ars~lu~,h,~ ~~~.~ ~...... ,~P~~ ~; con~Prve
property, protect any of IFA's assets or
compromise including the power to sell, compound,
upon or assign debts for purposes of collection
he deems such terms and conditions as
and appropriate, and the power to initiate
any other maintain actions at law or equity or
in type of action or proceeding of any nature,
this and other jurisdictions;
- g - available creditor's remedies (iii) to pursue any claims; to enforce the Liquidator's the assets and private sales of (e) to conduct public
including any real property; and property of IFA, hypothecate, invest., deposit, (f) to acquire, or otherwise sell, transfer, abandon, encumber, lease, improve, of IFA, and to with any asset or property dispose of or deal of any securities or or otherwise dispose sell, reinvest, trade as terms and conditions by IFA, upon such bonds presently held irrespective of to be fair and reasonable, the Liquidator deems carried on the books such property was last the value at which power to execute, shall also have the of IFA. The Liquidator releases any and all deeds, assignments, acknowledge and deliver to effectuate any sale necessary or proper and other instruments the in connection with other transaction of property or
rehabilitation; money on of the Court, to ~borrow (g) upon approval security and to of IFA with or without the pledge of assets to that transaction all documents necessary execute and deliver Neither the facilitating the liquidation. for the purpose of held appointees shall be his designees or Commissioner nor for any loans or personal capacities liable in their official
made for such purposes;
- 9 - as are necessary to (h) to enter into such contracts contracts to to affirm or disavow any carry out this Order and which IFA is a party; IFA prosecute, in the name of (i) to institute and to other legal any and all suits and or in his own name, is a to which IFA or the Liquidator proceedings, to defend suits or subsequent elsewhere, commenced prior party, in this State or of suits, the prosecution or defense to this Order, to abandon to which he deems inappropriate legal proceedings and claims or compromise suits, legal proceedings pursue further and to
conditions as he deems appropriate; claims on such terms and which may exist on behalf (j) to prosecute any action
or shareholders of IFA against of the creditors, policyholders, or entity; of IFA or any other person any officer or director and additional acts as he (k) to perform such further or for the accomplishment of may deem necessary Or~ cl~Jj:~LvNilute intention of liquidation, it being the in aid of the purpose of not be enumeration of powers shall this Order that the aforesaid Deputy upon the Liquidator or construed as a limitation
Liquidator. the at his discretion as of 14. The Liquidator may and the defense of claims, suits date of this Order discontinue in which the this State and elsewhere, other proceedings, in and including those claims made insureds of IFA are parties,
- 10 - date of this suits and proceedings undertaken prior to the
Order.
given 15. The Liquidator shall give or cause to be
of general notice of the entry of this Order once in a newspaper
offices circulation in the county within which IFA's corporate
; The Courier were located, specifically, The Newark Star Ledger
Wall Street Post; any one of the following publications: The
Law Journal, Journal or The New York Times; and The New Jersey
the date of publication to occur as soon as practicable after this Order.
from 16. The amounts recoverable by the Liquidator
of IFA any reinsurer of any reinsurance contract or reinsurer
proceeding, shall not be reduced as a result of this delinquency
on a or by reason of any partial payment or distribution
be allowed reinsured policy, contract or claim. Setoffs shall
consent of the between IFA and its reinsurer only with the
or an Liquidator. Unless either the insurance contract
payment made applicable statute provides to the contrary,
not diminish the directly to an insured or other creditor shall
reinsurer's obligation to IFA.
17. (a) Any agent, broker, premium finance company,
for the or any other person, other than the insured, responsible
pay any unpaid payment of a premium, shall be obligated to
the records of premiums, whether earned or unearned, as shown on
- 11 - IFA as of the date of entry of this Order. No credit or set-off shall be allowed in favor of such person against his account with IFA for the unearned portion of the premium on any canceled contract or policy, unless (i) that contract or policy was canceled prior to the entry of this Order; and (ii) the unearned premium on the canceled contract or policy was in fact refunded or credited to the insured or his or her assigns prior to the entry of this Order. The Liquidator shall also have the right to recover from such person any part of an unearned premium that represents a commission to such person.
(b) All policyholders of IFA shall be obligated to pay any unpaid earned premium due to IFA at any time, as shown on the records of IFA.
18. Existing contracts and other obligations by and between IFA and any reinsurer may, at the discretion of the
Liquidator, be terminated. Such termination shall be effected b y written notice issued by the Liquidator addressed to the reinsurer.
19. All further papers filed in these proceedings shall bear the caption and be entitled: "I/M/0 the Liquidation of IFA Insurance Company".
20. If any provision of this Order or the application thereof is for any reason held to be invalid, the remainder of
- 12 - this order and the application thereof to other persons or circumstances shall not be affected.
21. Any person, corporation or other entity having notice of this order who fails to abide by its terms shall be directed to appear before this court to show good cause, if any they may have, as to why they should not be held in contempt of
Court for violation of the provisions of this Order.
22. The Commissioner as Liquidator may at any time make further application for such additional and different relief as he sees fit.
23. This court shall retain jurisdiction for all purposes necessary to effectuate and enforce this Order. ~~~
~~f ~~--~ ~ t Paul Inner, P.J.Ch.Div.
- 13 -