Liquidation Of The HOW Companies
Question:
What is the current status of HOW Insurance Company, a Risk Retention Group ("HOWIC"), Home Owners Warranty Corporation ("HOW"), and Home Warranty Corporation ("HWC") (collectively, the "HOW Companies")?
Answer:
The HOW Companies are currently in receivership for liquidation pursuant to the Order Approving Plans of Liquidation ("Liquidation Order") issued on June 13, 2005, by the State Corporation Commission of the Commonwealth of Virginia (the "Commission"). The Liquidation Order resulted from the Deputy Receiver’s filing his Application for Orders Setting Hearing on Plans of Liquidation for HOW Insurance Company, a Risk Retention Group, Home Owners Warranty Corporation, and Home Warranty Corporation, Establishing Response Date, Approving Plans of Liquidation, Approving Claims Bar Date, and Related Matters ("Liquidation Application") and a related hearing held May 17, 2005 ("May 17 Hearing") at the Commission.
Question:
Why did the Commission place the HOW Companies in liquidation?
Answer:
Pursuant to the Liquidation Application and the May 17 Hearing, the Commission determined that efforts to rehabilitate the HOW Companies would be useless, and the HOW Companies should be liquidated pursuant to the Plans of Liquidation provided as Exhibit A of the Liquidation Application, except as modified by the Commission’s Liquidation Order. The Plans of Liquidation include a HOWIC Plan of Liquidation and a HOW/HWC Plan of Liquidation, which is to be implemented upon the completion of the HOWIC Plan of Liquidation.
Question:
What has the Deputy Receiver issued with regard to the liquidation of the HOW Companies?
Answer:
The Deputy Receiver was authorized by the Commission to issue his Seventh Directive of Deputy Receiver (Implementing the HOWIC Plan of Liquidation) ("Seventh Directive"). The Seventh Directive issued June 12, 2008, provides a description of the HOWIC Plan of Liquidation and pursuant to that plan, provides a period for the filing of a Proof of Claim ("POC") against the HOW Companies. The time period was to commence thirty (30) days after the issuance of the Seventh Directive and ending on a deadline of six (6) months after such period begins (January 12, 2009).
Question:
Will additional directives be forthcoming?
Answer:
Yes. Upon the Deputy Receiver’s adoption of the HOWIC Plan of Liquidation and completion of actual liquidating distributions from HOWIC to HWC pursuant thereto, the Commission has authorized the Deputy Receiver to issue another directive adopting the HOW/HWC Plan of Liquidation described in Exhibit A of the Liquidation Application, as modified by the Liquidation Order.