ASSETS UNFROZEN TO PAY LEGAL COUNSEL
In a follow-up to a December 2, 2009 post regarding unauthorized insurance and reinsurance, funds previously frozen to ensure payment of a judgment in favor of plaintiff Everest National Insurance Co. were unfrozen to pay the judgment debtor/defendants’ legal fees. The funds were originally pledged as security for the defendants’ reimbursement obligation arising out of a letter of credit. When the security interest was released, Everest obtained an injunction restraining the defendants from transferring the funds so they would be available to satisfy the judgment. Before the injunction was entered, however, the funds were transferred to a trust account for the express purpose of paying legal fees. The court granted the defendants’ motion for an order authorizing release of the funds for the purpose of paying their legal fees. The defendants had no other source of cash to pay counsel, who threatened to withdraw if payment toward the accumulated legal fees could not be made. Everest National Insurance Co. v. Sutton, Case No. 07-722 (USDC D.N.J. Jan. 8, 2010).
This post written by Brian Perryman.
