In Re the Liquidation of Lawyers Mortgage Co.

Loughran, J. In this proceeding under former article XI (now XVI) of the Insurance Law for the liquidation of Lawyers Mortgage Company, the court approved a plan of reorganization which was adopted by the Superintendent of Insurance as liquidator. Pursuant thereto, the liquid assets were transferred to an “ Operating Company ” and four “ Organization Managers ” were appointed with authority to purchase the nonliquid assets for disposal through a “ Realization Corporation.” On July 23, 1942, the managers made a written offer to buy the nonliquid assets for $4,909,000 and thereupon requested the Superintendent to apply to the court for approval thereof. When he refused, they moved for an order directing him to petition the court for sanction of the sale contemplated by their offer. By *162 our leave, they have appealed to us from an affirmance of the denial of that motion. In liquidating a delinquent insurer, the Superintendent of Insurance acts as a statutory.receiver,— not as a receiver for the court. (Matter of People [Tit. & Mtge. Guar. Co.] 264 N. Y. 69.) Section 539 of the Insurance Law says that as liquidator the Superintendent may sell or otherwise dispose of the property of a delinquent insurer “ subject to the approval of the court ” (so, former § 421). The meaning of this is that the court may veto such action of the liquidator but cannot compel it. (Matter of Casualty Co. of Am. [Rubin Claim], 244 N. Y. 443, 449.) When it was the idea that assets in the keeping of a liquidator were to be disposed of only on an order of the court, the Legislature has had no difficulty in plainly saying so. (Matter of Bank of the United States, 290 N. Y. 279, 284.) We do not find in the cited statute any warrant for the notion that the Superintendent was bound to act upon the offer in question. Nor is any warrant therefor contained in the plan of reorganization. The provision for transfer of the liquid assets to the “ Operating Company ” required that the Superintendent should “ apply to the court for an order ” to that end. Such a direction is missing from the provision for disposition of the nonliquid assets. In that connection, the plan says that “ the Reorganization Managers shall request the Superintendent of Insurance to apply * * * for an order authorizing the sale * * * at a price and on terms satisfactory to him and approved by the court.” Thus the parties to the plan appear to have deliberately excluded the duty which the managers would now have us put upon the Superintendent. Though his refusal to consider their offer is not for us to question, his reasons therefor should be noticed. He said: “ Since the date of reorganization in 1937, all claims against the company have been determined and a 15% liquidating dividend has been paid to creditors of the company. We are continuing to liquidate the assets as expeditiously as possible and there is no point in now transferring this work to a new corporation.” The managers express distrust respecting the good faith of such an attitude but their concern in that regard does not make any question of law. The order should be affirmed, with costs.