Summary:
The North Carolina Court of Appeals ruled in the case between Mike Causey, Commissioner of Insurance, and several insurance companies owned by Greg Lindberg, including Southland National Insurance Corporation, Bankers Life Insurance Company, and Colorado Bankers Life Insurance Company. GBIG Holdings, LLC, owned by Lindberg, appealed against the orders directing the liquidation of the insurance companies.
The Court of Appeals held that as a shareholder, GBIG should not have been allowed to intervene and defend against the liquidation petition, as only a company’s directors are permitted to intervene to defend under N.C.G.S. § 58-30-95.
Commentary:
While it seems more obvious that Causey, as the North Carolina Commissioner of Insurance, would seek rehabilitation and eventually liquidation of an insurance company under N.C.G.S § 58‑30 et seq., this is yet another case where a failed business is being handled through avenues other than bankruptcy.
Whether GBIG would be able to meet the requirements of 11 U.S. Code § 303 to file an involuntary Chapter 11 bankruptcy and seek to continue the reorganization there would seem to require at least two other entities holding claims is unknown, but could remove this case from state to bankruptcy court.
To read a copy of the transcript, please see:
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