Preview
Emily D. Bergstrom (SB #191395)
emily@bhe.law
BHC LAW GROUP LLP ELECTRONICALLY
5900 Hollis Street, Suite O FILED
Emeryville, CA 94608 Superior Court of California,
County of San Francisco
Telephone: (510) 658-3600
Facsimile: (510) 658-1151 01/12/2024
Clerk of the Court
BY: WILLIAM TRUPEK
Attorneys for Defendant Deputy Clerk
DILLINGHAM CONSTRUCTION N.A., INC.
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN FRANCISCO
10 FRED STINNETT, as Successor-in-Interest to SFSC Case No. CGC-23-277160
and as Wrongful Death Heir of JAMES
11 STINNETT, Deceased, DILLINGHAM CONSTRUCTION N.A.,
12 INC.’S NOTICE OF COURT ORDER
Plaintiff;
13 vs.
14 CV SUPPLY, INC., etal.
15 Defendants.
16
17 TO ALL PARTIES, THEIR COUNSEL OF RECORD, AND THE COURT:
18 PLEASE TAKE NOTICE that The Chancery Court of Delaware in the matter of The
19 State of Delaware v. Arrowood Indemnity Company (C.A. No. 2023-1126-LWW) entered the
20 order attached hereto as Exhibit A on November 8, 2023, which includes a provision related to a
21 stay of all proceedings. See, Ex. A at § 20. Arrowood Indemnity Company is an insurer for
22 Defendant DILLINGHAM CONSTRUCTION N.A., INC.
23
BHC
LAW Dated: January 12, 2024 BHC LAW GROUP LLP
GROUP up
5900 Hollis Street,
Suite O
25
Emeryville, CA 94608 26
T: 510-658-3600
By ba) PR
Emily D. Bergstrom
F: $10-658-1151 27 Attorneys for Defendant
DILLINGHAM CONSTRUCTION N.A., INC.
28
-1-
DILLINGHAM CONSTRUCTION N.A., INC.’S NOTICE OF COURT ORDER
EXHIBIT A
On
GRANTED WITH MODIFICATIONS
AM
i
fy
“Shea IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
STATE OF DELAWARE ex rel.
THE HONORABLE TRINIDAD
NAVARRO, Insurance Commissioner
of the State of Delaware,
Plaintiff,
Vv. )C.A. No.
ARROWOOD INDEMNITY COMPANY, )
a Delaware Domestic Property & Casualty
Insurance Company, )
Defendant.
LIQUIDATION AND INJUNCTION ORDER WITH BAR DATE
WHEREAS, the Honorable Trinidad Navarro, Insurance Commissioner of the State
of Delaware (the "Commissioner"), has filed a verified complaint (the “Complaint”) and
Motion seeking the entry of a Liquidation and Injunction Order with Bar Date (the
“Motion”) concerning Arrowood Indemnity Company (“Arrowood”), pursuant to 18 Del.
C. § 5901, et seq.;
WHEREAS, the Receiver has provided the Court with evidence sufficient to support
the conclusion that Arrowood is insolvent, in an unsound condition, a condition that
renders its further transaction of insurance presently or prospectively hazardous to its
policyholders, and has consented to the entry of a Liquidation and Injunction Order with
Bar Date through a majority of the directors of the corporation;
WHEREAS, this Court finds that sufficient cause exists for the liquidation of
Arrowood, pursuant to 18 Del. C. §§ 5905 and 5906 and for the entry of a Liquidation and
Injunction Order with Bar Date (“Liquidation Order”) concerning Arrowood; and
WHEREAS, a formal hearing on the Commissioner's Motion is not necessary due to
Arrowood’s consent to the relief requested by the Motion and Arrowood’s waiver of formal
service of process and a formal hearing on the Motion;
NOW, THEREFORE, THE COURT FINDS AND ORDERS AS FOLLOWS:
The verified Complaint, including the exhibits thereto, contain sufficient
evidence to support the conclusion that Arrowood is insolvent, in an unsound condition,
and a condition that renders its further transaction of insurance presently or prospectively
hazardous to its policyholders. Because Arrowood has not contested the Complaint or the
Motion and has consented to entry of the Liquidation Order, the allegations of the
Complaint are deemed admitted as against Arrowood for purposes of this proceeding.
2 These allegations are also supported by the exhibits to the Complaint filed
contemporaneously with the Motion.
3 As a separate and independent basis for entry of the Liquidation Order,
evidence that all of the directors of Arrowood to the entry of the Liquidation Order has been
attached to the Complaint and submitted in support of the Motion.
4. Given the determination set forth above, a formal hearing on the Motion is
not necessary.
5. Consequently, it is hereby declared that: Arrowood is insolvent, in an
unsound condition, and in a condition that renders its further transaction of insurance
presently or prospectively hazardous to its policyholders. Therefore, sufficient cause exists
for the liquidation of Arrowood pursuant to 18 Del. C. §§ 5905, 5906, and 18 Del. C. ch. 59
and for the entry of a Liquidation Order concerning Arrowood.
6 Pursuant to 18 Del. C. § 5913(a), the Commissioner and his successors in office
are hereby appointed as the receiver (hereinafter the “Receiver”) of Arrowood.
7. Pursuant to 18 Del. C. §§ 5911 and 5913, the Receiver shall forthwith take
exclusive possession and control of the property of Arrowood, liquidate its business, and
deal with Arrowood’s property and business in the name of the Receiver or in the name of
Arrowood. Further, the Receiver shall be vested with all right, title, and interest in, of, and
to the property of Arrowood including, without limitation, all of Arrowood’s assets,
contracts, rights of action, books, records, bank accounts, certificates of deposits, collateral
securing obligations to, or for the benefit of, Arrowood or any trustee, bailee, or any agent
acting for or on behalf of Arrowood (collectively, the “Trustees”), securities or other funds,
and all real or personal property of any nature of Arrowood including, without limitation,
furniture, equipment, fixtures, and office supplies, wherever located, and including such
property of Arrowood or collateral securing obligations to, or for the benefit of, Arrowood
or any Trustee thereof that may be discovered hereafter, and all proceeds of or accessions
to any of the foregoing, wherever located, in the possession, custody, or control of
Arrowood or any Trustee therefore (collectively, the “Assets”).
8 The Receiver may, at his election, change to his own name as Receiver, the
name of any of Arrowood’s accounts, funds, or other Assets held with any bank, savings
and loan association, or other financial institution, and may withdraw such funds, accounts,
and other Assets from such institutions or take any other action necessary for the proper
conduct of this liquidation.
9. The Receiver is further authorized to take such actions as the nature of this
cause and interests of the policyholders, creditors, and stockholder of Arrowood and the
public may require in accordance with 18 Del. C. ch. 59.
10. The Receiver is hereby authorized to deal with the Assets, business, and
affairs of Arrowood including, without limitation, the right to sue, defend, and continue to
prosecute suits or actions already commenced by or for Arrowood, or for the benefit of
Arrowood's policyholders, creditors, and shareholders in the courts, tribunals, agencies, or
arbitration panels for this State and other states and jurisdictions in his name as Receiver of
Arrowood, or in the name of Arrowood.
dele The Receiver is hereby authorized to continue to make payments for medical
expenses and indemnity for workers compensation claimants and for medical expenses and
wage/income loss for motor vehicle claimants, and for medical expense and wage/income
loss payments under similar programs, including but not limited to the Federal Black Lung
4
program, until such time as the claims files are transferred to the applicable guaranty
association and the guaranty association begins making payments to the claimant.
12. The Receiver is hereby vested with the right, title, and interest in and to all
funds recoverable under treaties and agreements of reinsurance heretofore entered into by
Arrowood as the ceding insurer or as the assuming insurer, and all reinsurance companies
involved with Arrowood are enjoined and restrained from making any settlements with
any claimant or policyholder of Arrowood other than with the express written consent of
the Commissioner as Receiver, except as permitted by cut-through agreements or
endorsements which were issued to the policyholder, which were properly executed before
the date of this Order, which comply in all respects with 18 Del. C. § 914, as amended by 72
Del. Laws c. 405, and which were approved by the Delaware Insurance Department if such
approval was required. The amounts recoverable by the Receiver from any reinsurer of
Arrowood shall not be reduced or diminished as a result of this receivership proceeding or
by reason of any partial payment or distribution on a reinsured policy, contract, or claim,
and each such reinsurer of Arrowood is hereby enjoined and restrained from terminating,
canceling, failing to extend or renew, or reducing or changing coverage under any
reinsurance policy, reinsurance contract, or letter of credit. The Receiver may terminate or
rescind any reinsurance policy or contract that is contrary to the best interests of the
receivership.
13. All persons or entities (other than the Receiver or persons acting on behalf of
Arrowood with the consent of the Receiver) that have in their possession or control Assets
or possible Assets and/or have notice of these proceedings or of this Order are hereby
enjoined and restrained from transacting any business of, or on behalf of, Arrowood or
selling, transferring, destroying, wasting, encumbering, or disposing of any of the Assets,
without the prior written permission of the Receiver or until further Order of this Court.
This prohibition includes, without limitation, Assets or possible Assets pertaining to any
business transaction between Arrowood and any of said parties. No actions concerning,
involving, or relating to such Assets or possible Assets may be taken by any of the aforesaid
persons or entities enumerated herein, without the express written consent of the Receiver,
or until further Order of this Court.
14. All persons or entities having notice of these proceedings or of the Liquidation
Order are hereby enjoined and restrained from exercising or relying upon any contractual
right which would permit such third party or parties from withholding, failing to pay,
setting-off or netting, except pursuant to 18 Del. C. § 5927, or taking similar action with
respect to any obligations owed to Arrowood.
15. All persons or entities having notice of these proceedings or of the Liquidation
Order are hereby enjoined and restrained from commutating, terminating, accelerating or
modifying any policy of insurance, agreement of reinsurance, or other contract or
agreement, or asserting a default or event of default or otherwise exercising, asserting or
relying upon any other right or remedy, based upon: (1) the filing of the Complaint for Entry
6
of Liquidation and Injunction Order with Bar Date, (2) the entry of this Liquidation Order,
(3) the unsound or hazardous condition of Arrowood, (4) the impairment or insolvency of
Arrowood; or (5) the facts and circumstances set forth in the Complaint for Entry of
Liquidation and Injunction Order with Bar Date, without the prior written permission of
the Receiver or until further Order of this Court.
16. Except as otherwise indicated elsewhere in this Order or except as excluded
by express written notice provided by the Receiver, all persons or entities holding Assets or
possible Assets of, or on behalf of, Arrowood shall file with the Receiver within ten (10)
calendar days of the entry of this Order an accounting of those Assets and possible Assets,
regardless of whether such persons or entities dispute the Receiver’s entitlement to such
Assets.
‘lia Except as otherwise indicated elsewhere in this Order or except as excluded
by express written notice provided by the Receiver, all persons or entities holding Assets or
possible Assets of, or on behalf of, Arrowood, shall within ten (10) calendar days of the entry
of this Order turn those Assets or possible Assets over to the Receiver, regardless of whether
such persons or entities dispute the Receiver's entitlement to such Assets or possible Assets.
18. All persons and entities that have notice of these proceedings or of this Order
are hereby prohibited from instituting or further prosecuting any action at law or in equity
or in other proceedings against Arrowood, the Receiver, the Deputy Receiver(s), or the
Designees in connection with their duties as such, or from obtaining preferences, judgments,
attachments, or other like liens or encumbrances, or foreclosing upon or making any levy
against Arrowood or the Assets, or exercising any right adverse to the right of Arrowood to
or in the Assets, or in any way interfering with the Receiver, the Deputy Receiver(s), or the
Designees either in their possession and control of the Assets or in the discharge of their
duties hereunder.
19. All persons and entities are hereby enjoined and restrained from asserting any
claim against the Commissioner as Receiver of Arrowood, the Deputy Receiver(s), or the
Designees in connection with their duties as such, or against the Assets, except insofar as
such claims are brought in the liquidation proceedings of Arrowood and in a manner
otherwise compliant with this Order.
20. All persons or entities that have notice of these proceedings or of this Order
are hereby enjoined and restrained from instituting or further prosecuting any action at law
or in equity, or proceeding with any pretrial conference, trial, application for judgment, or
proceedings on judgment or settlements and such action at law, in equity, special, or other
proceedings in which Arrowood is obligated to defend a party insured or any other person
it is legally obligated to defend by virtue of its insurance contract for a period of 180 days
from the date hereof. Notwithstanding the foregoing injunction, at any time during the 180-
day period, the Receiver may at his discretion, when he deems it appropriate and in the best
interest of the Arrowood estate, its policyholders or creditors, consent to allow any such
proceeding or proceedings so enjoined to proceed.
21. All insurance policies, surety bonds, and contracts of insurance issued by
Arrowood, whether issued in the State of Delaware or elsewhere, in effect as of the date
of this Liquidation Order shall only continue in force until the earlier of the following
events: (i) the stated expiration or termination date and time of the insurance policy,
surety bond, or contract of insurance; (ii) the effective date and time of a replacement
insurance policy, surety bond, or contract of insurance of the same type issued by another
insurer regardless of whether the coverage is identical coverage; (iii) the effective date
and time that the Arrowood insurance policy, surety bond, or contract of insurance
obligation is transferred to another insurer or entity authorized by law to assume such
obligation; or (iv) the cancellation and termination for all purposes of the insurance
policy, surety bond, or contract of insurance at 12:01 a.m. on the thirtieth (30th) calendar
day from the date of this Order pursuant to Paragraph 22 below.
22. Except for those insurance policies, surety bonds, or contracts of insurance
which expire or are cancelled, terminated, or transferred earlier as set forth in Paragraph
21(i) through (iii) above, all insurance policies, surety bonds, or contracts of insurance
issued by Arrowood, whether issued in the State of Delaware or elsewhere, in effect as of
the date of this Liquidation Order, are hereby cancelled and terminated for all purposes
as of 12:01 a.m. on the thirtieth (30th) calendar day following the date of this Liquidation
Order. For purposes of this paragraph, even if the thirtieth (30th) calendar day following
the date of this Liquidation Order is a Saturday, Sunday, or holiday, the insurance policy,
9
surety bond, or contract of insurance shall be cancelled and terminated as of 12:01 a.m.
on the thirtieth (30th) calendar day following the date of this Liquidation Order. The
Receiver shall notify promptly all policyholders, principals, or obligees as applicable of
such policy, surety bond, or contract cancellation and termination by United States first
class mail at the last known address of such policyholders, principals or obliges.
23. Pursuant to 18 Del. C. § 5924, the rights and liabilities of Arrowood and of
its creditors, policyholders, principals, obligees, claimants, stockholders, members,
subscribers, and all other persons interested in its estate shall, unless otherwise directed
by the Court, be fixed as of the date of this Liquidation Order, subject to the provisions
of Chapter 59 of Title 18 of the Delaware Code with respect to the rights of claimants
holding contingent claims.
24. ANY AND ALL CLAIMS NOT FILED WITH THE RECEIVER ON OR
BEFORE THE CLOSE OF BUSINESS ON JANUARY 15, 2025 (THE "BAR DATE") SHALL
BE BARRED FROM CLASSES II THROUGH VI AS THOSE CLASSES ARE DEFINED IN
18 DEL. C. §§ 5918(e)(2) THROUGH (e)(6) AND SHALL NOT RECEIVE ANY
DISTRIBUTIONS FROM THE GENERAL ASSETS OF THE ESTATE OF ARROWOOD
UNLESS AND UNTIL ASSETS BECOME AVAILABLE FOR A DISTRIBUTION TO
CLASS VII CLAIMANTS AS DEFINED IN 18 DEL. C. § 5918(e)(7). THIS BAR DATE
SHALL SUPERSEDE ANY APPLICABLE STATUTES OF LIMITATIONS OR OTHER
STATUTORY OR CONTRACTUAL TIME LIMITS WHICH HAVE NOT YET EXPIRED
10
WHETHER ARISING UNDER DELAWARE LAW, UNDER THE APPLICABLE LAWS
OF ANY OTHER JURISDICTION, OR UNDER A CONTRACT WITH ARROWOOD BUT
SHALL ONLY APPLY TO CLAIMS AGAINST ARROWOOD IN THE LIQUIDATION
PROCEEDINGS AND DOES NOT APPLY TO, AND EXCLUDES, CLAIMS BROUGHT
BY ARROWOOD. ALL CLAIMANTS SHALL ATTACH TO SUCH PROOF OF CLAIM
DOCUMENTATION SUFFICIENT TO SUPPORT SUCH CLAIM. FOR NON-
CONTINGENT CLAIMS, THE FILED CLAIMS SHALL NOT BE REQUIRED TO BE
LIQUIDATED AND ABSOLUTE ON OR BEFORE THE BAR DATE SET FORTH
HEREIN.
25. CONTINGENT AND UNLIQUIDATED CLAIMS THAT ARE PROPERLY
FILED WITH THE RECEIVER IN ACCORDANCE WITH THIS ORDER SHALL ONLY
BE ELIGIBLE TO SHARE IN A DISTRIBUTION OF THE ASSETS OF ARROWOOD IN
ACCORDANCE WITH 18 DEL. C. § 5928.
26. Within sixty (60) calendar days after the date of this Order, or as soon as
possible after an interested party or potential creditor subsequently becomes known to
the Receiver, the Receiver shall serve a copy of this Liquidation Order, a Notice of
Liquidation substantially in the form appended to the Motion as Exhibit C, a Proof of
Claim Form substantially in the form appended to the Motion as Exhibit D, and the
Instructions for the Proof of Claim Form substantially in the form appended to the Motion
as Exhibit E, on all interested parties, all known potential creditors, all current and former
11
stockholders of Arrowood, all former Board members of the Arrowood, its third party
adjusters, its managing general underwriters, its brokers, its agents, its reinsurer(s), and
any reinsurance intermediaries, all other known vendors, all state insurance guaranty
associations providing coverage for the lines of business written by Arrowood, and all
State Insurance Commissioners by United States first class mail, postage prepaid,
provided that in the Receiver's discretion such notice may be mailed instead by United
States first class certified mail, return receipt requested, or other United States mail
providing proof of mailing, to such interested party or potential creditor's last known
address in the company's files.
27. Within thirty (30) calendar days after the date of this Order, the Receiver
shall also publish this Liquidation Order, the Notice of Liquidation, Proof of Claim Form,
and the Instructions to the Proof of Claim Form on the Delaware Department of Insurance
website at the link referred to in Exhibit “E” to the Motion.
28. Pursuant to the provisions of 18 Del. C. §§ 5904(b) and 5928(c), no judgment
against Arrowood and/or one or more of its insureds taken after the date of this
Liquidation Order shall be considered in the liquidation proceedings as evidence of
liability or of the amount of damages, and no judgment against Arrowood and/or one or
more of its insureds taken by default or by collusion prior to the effective date of the
Liquidation Order shall be considered as conclusive evidence in the liquidation
proceedings, either of the liability of Arrowood and/or one or more of its insureds to such
12
person or entity upon such cause of action or of the amount of damages to which such
person or entity is therein entitled.
29. The Receiver shall submit claim Recommendation Reports to the Court
within a reasonable time after the Receiver's investigation concerning all claims
submitted by a particular claimant has been completed.
30. The Receiver will file reports of receipts and disbursements with the Court
on an annual basis in a form consistent with past practice in receiverships.
31. The filing or recording of this Order or a certified copy hereof with the
Register in Chancery and with the recorder of deeds of the jurisdiction in which Arrowood’s
corporate and administrative offices are located or, in the case of real estate or other
recorded property interests, with the recorder of deeds of the jurisdictions where the
property is located, shall impart the same notice as would be imparted by a deed, bill of
sale, or other evidence of title duly filed or recorded with that recorder of deeds. Without
limiting the foregoing, the filing of this Order with the Register in Chancery also constitutes
notice to all sureties and fidelity bondholders of Arrowood of all potential claims against
Arrowood under such policies and shall constitute the perfection of a lien in favor of
Arrowood under the Uniform Commercial Code or any like Federal or state law, regulation,
or order dealing with the priority of claims.
32. The Receiver is hereby authorized to transfer some or all of Arrowood’s
Assets and liabilities to a separate affiliate or subsidiary for the overall benefit of
13
Arrowood’s policyholders, creditors, and shareholders, subject to approval by this Court.
33. The Receiver may, in his discretion, reject any executory contract to which
Arrowood is a party.
34. The Receiver may, in his discretion, appoint one or more consultants or other
persons to serve as Deputy Receiver to assist the Receiver in accomplishing the directives
of this Order. The Deputy Receiver(s) shall serve at the pleasure of the Receiver and, subject
to the approval of the Receiver, shall be entitled to exercise all of the powers and authorities
vested in the Receiver pursuant to this Order and applicable law.
35. The Receiver may employ or continue to employ and fix the compensation of
such deputies, counsel, clerks, employees, accountants, actuaries, consultants, assistants
and other personnel (collectively, the “Designees”) as considered necessary, and all
compensation and expenses of the Receiver, the Deputy Receiver(s) and the Designees and
of taking possession of Arrowood and conducting this proceeding shall be paid out of the
funds and assets of Arrowood as administrative expenses. The Receiver may also retain
those of Arrowood’s current management personnel and other employees as Designees as
he in his discretion determines would facilitate the liquidation of Arrowood. All such
Designees shall be deemed to have agreed to submit disputes concerning their rights,
obligations, and compensation in their capacity as Designees to this Court.
36. The Receiver, the Deputy Receiver(s), and the Designees (collectively, the
“Indemnitees”) shall have no personal liability for their acts or omissions in connection with
14
their duties, provided that such acts or omissions are or were undertaken in good faith and
without willful misconduct, gross negligence, or criminal intent. All expenses, costs, and
attorneys’ fees incurred by the Indemnitees in connection with any lawsuit brought against
them in their representative capacities shall be subject to the approval of the Receiver, except
that in the event that the Receiver is the Indemnitee, this Court’s approval shall be required,
and such expenses, costs, and attorneys’ fees shall be exclusively paid out of the funds and
assets of Arrowood. The Indemnitees in their capacities as such shall not be deemed to be
employees of the State of Delaware.
37. Hereafter the caption of this cause and all pleadings in this matter shall read
as:
"IN THE MATTER OF THE LIQUIDATION
OF ARROWOOD INDEMNITY COMPANY."
38. This Court shall retain jurisdiction in this cause for the purpose of granting
such other and further relief as this cause, the interests of the policyholders, creditors,
stockholder of Arrowood, and the public may require. The Receiver, or any interested party
15
upon notice to the Receiver, may at any time make application for such other and further
relief as either sees fit.
SO ORDERED this day of 2023.
Vice Chancellor
16
it RYeTen Reece mtd PRUs aeestice Sneed Mem kee At
Court: DE Court of Chancery Civil Action
Judge: Lori W. Will
File & Serve
Transaction ID: 71343102
Current Date: Nov 08, 2023
Case Number: 2023-1126-LWW
Case Name: State of Delaware ex rel. The Honorable Trinidad Navarro v. Arrowood Indemnity
Company
Court Authorizer: Lori W. Will
Court Authorizer
Comments:
As set forth in the stipulation at docket entry 8, the relief sought in the motion and the facts supporting the motion
are uncontested. The directors of the defendant have agreed to the relief sought in this liquidation order.
Accordingly, the order is granted as unopposed.
/s/ Judge Lori W. Will
PROOF OF SERVICE
Fred Stinnett, as Successor-In-Interest to and as Wrongful Death Heir of James Stinnett, Deceased v.
CV Supply Inc., et al.
San Francisco County Superior Court Case No. CGC-23-277160
I, Michelle Bryant, declare that I am, and was at the time of service of the documents
herein referred to, over the age of 18 years, and not a party to the action; and I am employed in
the County of Alameda, State of California. My business address is 5900 Hollis St., Ste. O,
Emeryville, California 94608.
On January 12, 2024, I electronically transmitting the document(s) listed below to File &
ServeXpress, an electronic filing service provider at www.fileandservexpress.com on the
recipients designated on the Transmission Receipt located on File & Serve’s website. To my
knowledge, the transmission was reported as complete and without error. See Cal. R. Ct. R. 2053,
2055, 2060.
10
DILLINGHAM CONSTRUCTION N.A., INC.’S NOTICE OF COURT ORDER
11
12 on the recipients designated on the Transmission Receipt located on the File & ServeXpress
website.
13
I declare under penalty of perjury pursuant to the laws of the State of California that the
14 foregoing is true and correct and that this declaration was executed on January 12, 2024, at
Emeryville, California.
15
16
\ ub s
17 Michelle Bryant
18
19
20
21
22
23
BHC
LAW
GROUP up
5900 Hollis Street, 25
Suite O
Emeryville, CA 94608 26
T: 510-658-3600
F: $10-658-1151 27
28
-1-
PROOF OF SERVICE
Preview
Emily D. Bergstrom (SB #191395) emily@bhe.law BHC LAW GROUP LLP ELECTRONICALLY 5900 Hollis Street, Suite O FILED Emeryville, CA 94608 Superior Court of California, County of San Francisco Telephone: (510) 658-3600 Facsimile: (510) 658-1151 01/12/2024 Clerk of the Court BY: WILLIAM TRUPEK Attorneys for Defendant Deputy Clerk DILLINGHAM CONSTRUCTION N.A., INC. SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN FRANCISCO 10 FRED STINNETT, as Successor-in-Interest to SFSC Case No. CGC-23-277160 and as Wrongful Death Heir of JAMES 11 STINNETT, Deceased, DILLINGHAM CONSTRUCTION N.A., 12 INC.’S NOTICE OF COURT ORDER Plaintiff; 13 vs. 14 CV SUPPLY, INC., etal. 15 Defendants. 16 17 TO ALL PARTIES, THEIR COUNSEL OF RECORD, AND THE COURT: 18 PLEASE TAKE NOTICE that The Chancery Court of Delaware in the matter of The 19 State of Delaware v. Arrowood Indemnity Company (C.A. No. 2023-1126-LWW) entered the 20 order attached hereto as Exhibit A on November 8, 2023, which includes a provision related to a 21 stay of all proceedings. See, Ex. A at § 20. Arrowood Indemnity Company is an insurer for 22 Defendant DILLINGHAM CONSTRUCTION N.A., INC. 23 BHC LAW Dated: January 12, 2024 BHC LAW GROUP LLP GROUP up 5900 Hollis Street, Suite O 25 Emeryville, CA 94608 26 T: 510-658-3600 By ba) PR Emily D. Bergstrom F: $10-658-1151 27 Attorneys for Defendant DILLINGHAM CONSTRUCTION N.A., INC. 28 -1- DILLINGHAM CONSTRUCTION N.A., INC.’S NOTICE OF COURT ORDER EXHIBIT A On GRANTED WITH MODIFICATIONS AM i fy “Shea IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE STATE OF DELAWARE ex rel. THE HONORABLE TRINIDAD NAVARRO, Insurance Commissioner of the State of Delaware, Plaintiff, Vv. )C.A. No. ARROWOOD INDEMNITY COMPANY, ) a Delaware Domestic Property & Casualty Insurance Company, ) Defendant. LIQUIDATION AND INJUNCTION ORDER WITH BAR DATE WHEREAS, the Honorable Trinidad Navarro, Insurance Commissioner of the State of Delaware (the "Commissioner"), has filed a verified complaint (the “Complaint”) and Motion seeking the entry of a Liquidation and Injunction Order with Bar Date (the “Motion”) concerning Arrowood Indemnity Company (“Arrowood”), pursuant to 18 Del. C. § 5901, et seq.; WHEREAS, the Receiver has provided the Court with evidence sufficient to support the conclusion that Arrowood is insolvent, in an unsound condition, a condition that renders its further transaction of insurance presently or prospectively hazardous to its policyholders, and has consented to the entry of a Liquidation and Injunction Order with Bar Date through a majority of the directors of the corporation; WHEREAS, this Court finds that sufficient cause exists for the liquidation of Arrowood, pursuant to 18 Del. C. §§ 5905 and 5906 and for the entry of a Liquidation and Injunction Order with Bar Date (“Liquidation Order”) concerning Arrowood; and WHEREAS, a formal hearing on the Commissioner's Motion is not necessary due to Arrowood’s consent to the relief requested by the Motion and Arrowood’s waiver of formal service of process and a formal hearing on the Motion; NOW, THEREFORE, THE COURT FINDS AND ORDERS AS FOLLOWS: The verified Complaint, including the exhibits thereto, contain sufficient evidence to support the conclusion that Arrowood is insolvent, in an unsound condition, and a condition that renders its further transaction of insurance presently or prospectively hazardous to its policyholders. Because Arrowood has not contested the Complaint or the Motion and has consented to entry of the Liquidation Order, the allegations of the Complaint are deemed admitted as against Arrowood for purposes of this proceeding. 2 These allegations are also supported by the exhibits to the Complaint filed contemporaneously with the Motion. 3 As a separate and independent basis for entry of the Liquidation Order, evidence that all of the directors of Arrowood to the entry of the Liquidation Order has been attached to the Complaint and submitted in support of the Motion. 4. Given the determination set forth above, a formal hearing on the Motion is not necessary. 5. Consequently, it is hereby declared that: Arrowood is insolvent, in an unsound condition, and in a condition that renders its further transaction of insurance presently or prospectively hazardous to its policyholders. Therefore, sufficient cause exists for the liquidation of Arrowood pursuant to 18 Del. C. §§ 5905, 5906, and 18 Del. C. ch. 59 and for the entry of a Liquidation Order concerning Arrowood. 6 Pursuant to 18 Del. C. § 5913(a), the Commissioner and his successors in office are hereby appointed as the receiver (hereinafter the “Receiver”) of Arrowood. 7. Pursuant to 18 Del. C. §§ 5911 and 5913, the Receiver shall forthwith take exclusive possession and control of the property of Arrowood, liquidate its business, and deal with Arrowood’s property and business in the name of the Receiver or in the name of Arrowood. Further, the Receiver shall be vested with all right, title, and interest in, of, and to the property of Arrowood including, without limitation, all of Arrowood’s assets, contracts, rights of action, books, records, bank accounts, certificates of deposits, collateral securing obligations to, or for the benefit of, Arrowood or any trustee, bailee, or any agent acting for or on behalf of Arrowood (collectively, the “Trustees”), securities or other funds, and all real or personal property of any nature of Arrowood including, without limitation, furniture, equipment, fixtures, and office supplies, wherever located, and including such property of Arrowood or collateral securing obligations to, or for the benefit of, Arrowood or any Trustee thereof that may be discovered hereafter, and all proceeds of or accessions to any of the foregoing, wherever located, in the possession, custody, or control of Arrowood or any Trustee therefore (collectively, the “Assets”). 8 The Receiver may, at his election, change to his own name as Receiver, the name of any of Arrowood’s accounts, funds, or other Assets held with any bank, savings and loan association, or other financial institution, and may withdraw such funds, accounts, and other Assets from such institutions or take any other action necessary for the proper conduct of this liquidation. 9. The Receiver is further authorized to take such actions as the nature of this cause and interests of the policyholders, creditors, and stockholder of Arrowood and the public may require in accordance with 18 Del. C. ch. 59. 10. The Receiver is hereby authorized to deal with the Assets, business, and affairs of Arrowood including, without limitation, the right to sue, defend, and continue to prosecute suits or actions already commenced by or for Arrowood, or for the benefit of Arrowood's policyholders, creditors, and shareholders in the courts, tribunals, agencies, or arbitration panels for this State and other states and jurisdictions in his name as Receiver of Arrowood, or in the name of Arrowood. dele The Receiver is hereby authorized to continue to make payments for medical expenses and indemnity for workers compensation claimants and for medical expenses and wage/income loss for motor vehicle claimants, and for medical expense and wage/income loss payments under similar programs, including but not limited to the Federal Black Lung 4 program, until such time as the claims files are transferred to the applicable guaranty association and the guaranty association begins making payments to the claimant. 12. The Receiver is hereby vested with the right, title, and interest in and to all funds recoverable under treaties and agreements of reinsurance heretofore entered into by Arrowood as the ceding insurer or as the assuming insurer, and all reinsurance companies involved with Arrowood are enjoined and restrained from making any settlements with any claimant or policyholder of Arrowood other than with the express written consent of the Commissioner as Receiver, except as permitted by cut-through agreements or endorsements which were issued to the policyholder, which were properly executed before the date of this Order, which comply in all respects with 18 Del. C. § 914, as amended by 72 Del. Laws c. 405, and which were approved by the Delaware Insurance Department if such approval was required. The amounts recoverable by the Receiver from any reinsurer of Arrowood shall not be reduced or diminished as a result of this receivership proceeding or by reason of any partial payment or distribution on a reinsured policy, contract, or claim, and each such reinsurer of Arrowood is hereby enjoined and restrained from terminating, canceling, failing to extend or renew, or reducing or changing coverage under any reinsurance policy, reinsurance contract, or letter of credit. The Receiver may terminate or rescind any reinsurance policy or contract that is contrary to the best interests of the receivership. 13. All persons or entities (other than the Receiver or persons acting on behalf of Arrowood with the consent of the Receiver) that have in their possession or control Assets or possible Assets and/or have notice of these proceedings or of this Order are hereby enjoined and restrained from transacting any business of, or on behalf of, Arrowood or selling, transferring, destroying, wasting, encumbering, or disposing of any of the Assets, without the prior written permission of the Receiver or until further Order of this Court. This prohibition includes, without limitation, Assets or possible Assets pertaining to any business transaction between Arrowood and any of said parties. No actions concerning, involving, or relating to such Assets or possible Assets may be taken by any of the aforesaid persons or entities enumerated herein, without the express written consent of the Receiver, or until further Order of this Court. 14. All persons or entities having notice of these proceedings or of the Liquidation Order are hereby enjoined and restrained from exercising or relying upon any contractual right which would permit such third party or parties from withholding, failing to pay, setting-off or netting, except pursuant to 18 Del. C. § 5927, or taking similar action with respect to any obligations owed to Arrowood. 15. All persons or entities having notice of these proceedings or of the Liquidation Order are hereby enjoined and restrained from commutating, terminating, accelerating or modifying any policy of insurance, agreement of reinsurance, or other contract or agreement, or asserting a default or event of default or otherwise exercising, asserting or relying upon any other right or remedy, based upon: (1) the filing of the Complaint for Entry 6 of Liquidation and Injunction Order with Bar Date, (2) the entry of this Liquidation Order, (3) the unsound or hazardous condition of Arrowood, (4) the impairment or insolvency of Arrowood; or (5) the facts and circumstances set forth in the Complaint for Entry of Liquidation and Injunction Order with Bar Date, without the prior written permission of the Receiver or until further Order of this Court. 16. Except as otherwise indicated elsewhere in this Order or except as excluded by express written notice provided by the Receiver, all persons or entities holding Assets or possible Assets of, or on behalf of, Arrowood shall file with the Receiver within ten (10) calendar days of the entry of this Order an accounting of those Assets and possible Assets, regardless of whether such persons or entities dispute the Receiver’s entitlement to such Assets. ‘lia Except as otherwise indicated elsewhere in this Order or except as excluded by express written notice provided by the Receiver, all persons or entities holding Assets or possible Assets of, or on behalf of, Arrowood, shall within ten (10) calendar days of the entry of this Order turn those Assets or possible Assets over to the Receiver, regardless of whether such persons or entities dispute the Receiver's entitlement to such Assets or possible Assets. 18. All persons and entities that have notice of these proceedings or of this Order are hereby prohibited from instituting or further prosecuting any action at law or in equity or in other proceedings against Arrowood, the Receiver, the Deputy Receiver(s), or the Designees in connection with their duties as such, or from obtaining preferences, judgments, attachments, or other like liens or encumbrances, or foreclosing upon or making any levy against Arrowood or the Assets, or exercising any right adverse to the right of Arrowood to or in the Assets, or in any way interfering with the Receiver, the Deputy Receiver(s), or the Designees either in their possession and control of the Assets or in the discharge of their duties hereunder. 19. All persons and entities are hereby enjoined and restrained from asserting any claim against the Commissioner as Receiver of Arrowood, the Deputy Receiver(s), or the Designees in connection with their duties as such, or against the Assets, except insofar as such claims are brought in the liquidation proceedings of Arrowood and in a manner otherwise compliant with this Order. 20. All persons or entities that have notice of these proceedings or of this Order are hereby enjoined and restrained from instituting or further prosecuting any action at law or in equity, or proceeding with any pretrial conference, trial, application for judgment, or proceedings on judgment or settlements and such action at law, in equity, special, or other proceedings in which Arrowood is obligated to defend a party insured or any other person it is legally obligated to defend by virtue of its insurance contract for a period of 180 days from the date hereof. Notwithstanding the foregoing injunction, at any time during the 180- day period, the Receiver may at his discretion, when he deems it appropriate and in the best interest of the Arrowood estate, its policyholders or creditors, consent to allow any such proceeding or proceedings so enjoined to proceed. 21. All insurance policies, surety bonds, and contracts of insurance issued by Arrowood, whether issued in the State of Delaware or elsewhere, in effect as of the date of this Liquidation Order shall only continue in force until the earlier of the following events: (i) the stated expiration or termination date and time of the insurance policy, surety bond, or contract of insurance; (ii) the effective date and time of a replacement insurance policy, surety bond, or contract of insurance of the same type issued by another insurer regardless of whether the coverage is identical coverage; (iii) the effective date and time that the Arrowood insurance policy, surety bond, or contract of insurance obligation is transferred to another insurer or entity authorized by law to assume such obligation; or (iv) the cancellation and termination for all purposes of the insurance policy, surety bond, or contract of insurance at 12:01 a.m. on the thirtieth (30th) calendar day from the date of this Order pursuant to Paragraph 22 below. 22. Except for those insurance policies, surety bonds, or contracts of insurance which expire or are cancelled, terminated, or transferred earlier as set forth in Paragraph 21(i) through (iii) above, all insurance policies, surety bonds, or contracts of insurance issued by Arrowood, whether issued in the State of Delaware or elsewhere, in effect as of the date of this Liquidation Order, are hereby cancelled and terminated for all purposes as of 12:01 a.m. on the thirtieth (30th) calendar day following the date of this Liquidation Order. For purposes of this paragraph, even if the thirtieth (30th) calendar day following the date of this Liquidation Order is a Saturday, Sunday, or holiday, the insurance policy, 9 surety bond, or contract of insurance shall be cancelled and terminated as of 12:01 a.m. on the thirtieth (30th) calendar day following the date of this Liquidation Order. The Receiver shall notify promptly all policyholders, principals, or obligees as applicable of such policy, surety bond, or contract cancellation and termination by United States first class mail at the last known address of such policyholders, principals or obliges. 23. Pursuant to 18 Del. C. § 5924, the rights and liabilities of Arrowood and of its creditors, policyholders, principals, obligees, claimants, stockholders, members, subscribers, and all other persons interested in its estate shall, unless otherwise directed by the Court, be fixed as of the date of this Liquidation Order, subject to the provisions of Chapter 59 of Title 18 of the Delaware Code with respect to the rights of claimants holding contingent claims. 24. ANY AND ALL CLAIMS NOT FILED WITH THE RECEIVER ON OR BEFORE THE CLOSE OF BUSINESS ON JANUARY 15, 2025 (THE "BAR DATE") SHALL BE BARRED FROM CLASSES II THROUGH VI AS THOSE CLASSES ARE DEFINED IN 18 DEL. C. §§ 5918(e)(2) THROUGH (e)(6) AND SHALL NOT RECEIVE ANY DISTRIBUTIONS FROM THE GENERAL ASSETS OF THE ESTATE OF ARROWOOD UNLESS AND UNTIL ASSETS BECOME AVAILABLE FOR A DISTRIBUTION TO CLASS VII CLAIMANTS AS DEFINED IN 18 DEL. C. § 5918(e)(7). THIS BAR DATE SHALL SUPERSEDE ANY APPLICABLE STATUTES OF LIMITATIONS OR OTHER STATUTORY OR CONTRACTUAL TIME LIMITS WHICH HAVE NOT YET EXPIRED 10 WHETHER ARISING UNDER DELAWARE LAW, UNDER THE APPLICABLE LAWS OF ANY OTHER JURISDICTION, OR UNDER A CONTRACT WITH ARROWOOD BUT SHALL ONLY APPLY TO CLAIMS AGAINST ARROWOOD IN THE LIQUIDATION PROCEEDINGS AND DOES NOT APPLY TO, AND EXCLUDES, CLAIMS BROUGHT BY ARROWOOD. ALL CLAIMANTS SHALL ATTACH TO SUCH PROOF OF CLAIM DOCUMENTATION SUFFICIENT TO SUPPORT SUCH CLAIM. FOR NON- CONTINGENT CLAIMS, THE FILED CLAIMS SHALL NOT BE REQUIRED TO BE LIQUIDATED AND ABSOLUTE ON OR BEFORE THE BAR DATE SET FORTH HEREIN. 25. CONTINGENT AND UNLIQUIDATED CLAIMS THAT ARE PROPERLY FILED WITH THE RECEIVER IN ACCORDANCE WITH THIS ORDER SHALL ONLY BE ELIGIBLE TO SHARE IN A DISTRIBUTION OF THE ASSETS OF ARROWOOD IN ACCORDANCE WITH 18 DEL. C. § 5928. 26. Within sixty (60) calendar days after the date of this Order, or as soon as possible after an interested party or potential creditor subsequently becomes known to the Receiver, the Receiver shall serve a copy of this Liquidation Order, a Notice of Liquidation substantially in the form appended to the Motion as Exhibit C, a Proof of Claim Form substantially in the form appended to the Motion as Exhibit D, and the Instructions for the Proof of Claim Form substantially in the form appended to the Motion as Exhibit E, on all interested parties, all known potential creditors, all current and former 11 stockholders of Arrowood, all former Board members of the Arrowood, its third party adjusters, its managing general underwriters, its brokers, its agents, its reinsurer(s), and any reinsurance intermediaries, all other known vendors, all state insurance guaranty associations providing coverage for the lines of business written by Arrowood, and all State Insurance Commissioners by United States first class mail, postage prepaid, provided that in the Receiver's discretion such notice may be mailed instead by United States first class certified mail, return receipt requested, or other United States mail providing proof of mailing, to such interested party or potential creditor's last known address in the company's files. 27. Within thirty (30) calendar days after the date of this Order, the Receiver shall also publish this Liquidation Order, the Notice of Liquidation, Proof of Claim Form, and the Instructions to the Proof of Claim Form on the Delaware Department of Insurance website at the link referred to in Exhibit “E” to the Motion. 28. Pursuant to the provisions of 18 Del. C. §§ 5904(b) and 5928(c), no judgment against Arrowood and/or one or more of its insureds taken after the date of this Liquidation Order shall be considered in the liquidation proceedings as evidence of liability or of the amount of damages, and no judgment against Arrowood and/or one or more of its insureds taken by default or by collusion prior to the effective date of the Liquidation Order shall be considered as conclusive evidence in the liquidation proceedings, either of the liability of Arrowood and/or one or more of its insureds to such 12 person or entity upon such cause of action or of the amount of damages to which such person or entity is therein entitled. 29. The Receiver shall submit claim Recommendation Reports to the Court within a reasonable time after the Receiver's investigation concerning all claims submitted by a particular claimant has been completed. 30. The Receiver will file reports of receipts and disbursements with the Court on an annual basis in a form consistent with past practice in receiverships. 31. The filing or recording of this Order or a certified copy hereof with the Register in Chancery and with the recorder of deeds of the jurisdiction in which Arrowood’s corporate and administrative offices are located or, in the case of real estate or other recorded property interests, with the recorder of deeds of the jurisdictions where the property is located, shall impart the same notice as would be imparted by a deed, bill of sale, or other evidence of title duly filed or recorded with that recorder of deeds. Without limiting the foregoing, the filing of this Order with the Register in Chancery also constitutes notice to all sureties and fidelity bondholders of Arrowood of all potential claims against Arrowood under such policies and shall constitute the perfection of a lien in favor of Arrowood under the Uniform Commercial Code or any like Federal or state law, regulation, or order dealing with the priority of claims. 32. The Receiver is hereby authorized to transfer some or all of Arrowood’s Assets and liabilities to a separate affiliate or subsidiary for the overall benefit of 13 Arrowood’s policyholders, creditors, and shareholders, subject to approval by this Court. 33. The Receiver may, in his discretion, reject any executory contract to which Arrowood is a party. 34. The Receiver may, in his discretion, appoint one or more consultants or other persons to serve as Deputy Receiver to assist the Receiver in accomplishing the directives of this Order. The Deputy Receiver(s) shall serve at the pleasure of the Receiver and, subject to the approval of the Receiver, shall be entitled to exercise all of the powers and authorities vested in the Receiver pursuant to this Order and applicable law. 35. The Receiver may employ or continue to employ and fix the compensation of such deputies, counsel, clerks, employees, accountants, actuaries, consultants, assistants and other personnel (collectively, the “Designees”) as considered necessary, and all compensation and expenses of the Receiver, the Deputy Receiver(s) and the Designees and of taking possession of Arrowood and conducting this proceeding shall be paid out of the funds and assets of Arrowood as administrative expenses. The Receiver may also retain those of Arrowood’s current management personnel and other employees as Designees as he in his discretion determines would facilitate the liquidation of Arrowood. All such Designees shall be deemed to have agreed to submit disputes concerning their rights, obligations, and compensation in their capacity as Designees to this Court. 36. The Receiver, the Deputy Receiver(s), and the Designees (collectively, the “Indemnitees”) shall have no personal liability for their acts or omissions in connection with 14 their duties, provided that such acts or omissions are or were undertaken in good faith and without willful misconduct, gross negligence, or criminal intent. All expenses, costs, and attorneys’ fees incurred by the Indemnitees in connection with any lawsuit brought against them in their representative capacities shall be subject to the approval of the Receiver, except that in the event that the Receiver is the Indemnitee, this Court’s approval shall be required, and such expenses, costs, and attorneys’ fees shall be exclusively paid out of the funds and assets of Arrowood. The Indemnitees in their capacities as such shall not be deemed to be employees of the State of Delaware. 37. Hereafter the caption of this cause and all pleadings in this matter shall read as: "IN THE MATTER OF THE LIQUIDATION OF ARROWOOD INDEMNITY COMPANY." 38. This Court shall retain jurisdiction in this cause for the purpose of granting such other and further relief as this cause, the interests of the policyholders, creditors, stockholder of Arrowood, and the public may require. The Receiver, or any interested party 15 upon notice to the Receiver, may at any time make application for such other and further relief as either sees fit. SO ORDERED this day of 2023. Vice Chancellor 16 it RYeTen Reece mtd PRUs aeestice Sneed Mem kee At Court: DE Court of Chancery Civil Action Judge: Lori W. Will File & Serve Transaction ID: 71343102 Current Date: Nov 08, 2023 Case Number: 2023-1126-LWW Case Name: State of Delaware ex rel. The Honorable Trinidad Navarro v. Arrowood Indemnity Company Court Authorizer: Lori W. Will Court Authorizer Comments: As set forth in the stipulation at docket entry 8, the relief sought in the motion and the facts supporting the motion are uncontested. The directors of the defendant have agreed to the relief sought in this liquidation order. Accordingly, the order is granted as unopposed. /s/ Judge Lori W. Will PROOF OF SERVICE Fred Stinnett, as Successor-In-Interest to and as Wrongful Death Heir of James Stinnett, Deceased v. CV Supply Inc., et al. San Francisco County Superior Court Case No. CGC-23-277160 I, Michelle Bryant, declare that I am, and was at the time of service of the documents herein referred to, over the age of 18 years, and not a party to the action; and I am employed in the County of Alameda, State of California. My business address is 5900 Hollis St., Ste. O, Emeryville, California 94608. On January 12, 2024, I electronically transmitting the document(s) listed below to File & ServeXpress, an electronic filing service provider at www.fileandservexpress.com on the recipients designated on the Transmission Receipt located on File & Serve’s website. To my knowledge, the transmission was reported as complete and without error. See Cal. R. Ct. R. 2053, 2055, 2060. 10 DILLINGHAM CONSTRUCTION N.A., INC.’S NOTICE OF COURT ORDER 11 12 on the recipients designated on the Transmission Receipt located on the File & ServeXpress website. 13 I declare under penalty of perjury pursuant to the laws of the State of California that the 14 foregoing is true and correct and that this declaration was executed on January 12, 2024, at Emeryville, California. 15 16 \ ub s 17 Michelle Bryant 18 19 20 21 22 23 BHC LAW GROUP up 5900 Hollis Street, 25 Suite O Emeryville, CA 94608 26 T: 510-658-3600 F: $10-658-1151 27 28 -1- PROOF OF SERVICE