WILLIAM J. HARTNETT AND INTERNATIONAL FUNDING CORPORATION, APPELLANTS,
v.
SOUTHERN AMERICAN FIRE INSURANCE COMPANY, A FLORIDA CORPORATION AUTHORIZED TO TRANSACT AN INSURANCE BUSINESS, APPELLEE
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Majority shareholders of an insolvent insurance company in receivership appealed orders denying them standing to object to the receiver's recommendations on claims filed in the insolvency proceeding. The court affirmed, holding that Chapter 631 of the Florida Statutes does not protect shareholder interests in insurance company liquidations.
Majority shareholders do not have standing to contest claims filed in the receivership of an insolvent insurance company because Chapter 631 is designed to protect the interests of insureds, creditors, and the public—not shareholders. The court therefore declined to address the second issue regarding the Guaranty Association's reimbursement rights.
[1] Shareholders of an insolvent insurance company do not have standing to contest claims filed in the receivership proceeding under Chapter 631, Florida Statutes.
[2] Chapter 631, Florida Statutes, governing the liquidation of insolvent insurers, is to be liberally construed to protect the interests of insureds, creditors, and the publ…
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Join FLexlaw to unlock all legal intelligence“the purpose of the act "is [for] the protection of the interests of insureds, creditors and the public generally_" (e.s.) Absent from the purpose of the act is the protection of shareholders of the insolvent insurance company.”
Establishes that shareholder protection is explicitly excluded from the statutory purpose of Chapter 631, supporting denial of standing
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Join FLexlaw to unlock all legal intelligenceSouthern American Fire Insurance Company has been in receivership since 1975 under Chapter 631, Florida Statutes. William J. Hartnett and Internationa…
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ERVIN, Judge.
Appellants appeal two orders of the circuit court. The first, BJ-192, denies objections filed by appellants to the receiver’s recommendation to a claim filed pursuant to Chapter 631. The second, BJ-193, denies appellants’ standing under Chapter 631, Florida Statutes (1975) to object to the receiver’s recommendations on various claims filed by a third person. We affirm both orders:
Appellants, William J. Hartnett and International Funding Corporation, are the majority shareholders of Southern American Fire Insurance Company, which has been in receivership under the provisions of Chapter 631 since 1975. Appellants filed a massive number of objections to recommendations made by the receiver in this insolvency proceeding. In both appeals appellants have raised the same two issues: First, whether the majority shareholders have standing to contest claims filed in the receivership of Southern American, and second, whether the Florida Insurance Guaranty Association may seek reimbursement from the receivership.
The liquidation of the subject insurance company began in 1975 and is governed by Chapter 631, Florida Statutes (1975). Claims against insolvent insurers are processed in accordance with Section 631.181, which provides, after claims are filed, that the receiver prepare a report together with his recommendations which are forwarded to the circuit court. The court thereafter conducts a hearing upon providing notice “to such persons as shall appear to the court to be interested therein.” Section 631.181(3) (e.s.). All interested persons are entitled to appear at the hearing. Section 631.181(4). Section 631.001(4) provides that the purpose of the act “is [for] the protection of the interests of insureds, creditors and the public generally_” (e.s.) Absent from the purpose of the act is the protection of shareholders of the insolvent insurance company. Section 631.001(3) provides that the act “shall be liberally construed to effect the purpose stated in subsection (4).” The order of the trial court holding that appellants did not have standing is consistent with the construction of Chapter 631 and cannot be characterized as an abuse of discretion by the trial court. Since appellants do not have standing, we decline to consider the second issue they have raised.
AFFIRMED.
WIGGINTON and BARFIELD, JJ., concur.