Wednesday, January 13, 2010

Are All Creditors in a Liquidation Proceeding Created Equal?

According to the First Department, with respect to choice of law, the answer is "Yes." In Matter of Midland Ins. Co., the First Department held that the Supreme Court’s order “which granted the major policyholders' motion for partial summary judgment declaring that for each policyholder an individualized choice-of-law review must be undertaken following the ‘grouping of contacts’ approach and giving predominant weight to the policyholder's principal place of business, and denied the intervening reinsurers' cross motion for partial summary judgment on the applicability of New York substantive law to all policyholder claims under the Midland policies in the liquidation, should be reversed, on the law, without costs, the MPHs’ motion denied, and the intervening reinsurers’ cross motion granted, declaring that New York substantive law governs the interpretation and application of the Midland insurance policies at issue in this liquidation proceeding.”

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