In re Chipman-Union, Inc. (Ch. 11 Case No. 01-31418, Adv. No. 04-03008)
The corporate debtor employed an insurance broker to procure its insurance coverage. The debtor made monthly payments to the broker which in turn paid the insurance company. The broker sent payments to the insurer regardless of whether the debtor had sent payments to the broker.
The debtor defaulted on its payments to the broker. The broker offered the debtor a revised payment schedule conditioned upon the debtor's agreement that any premium refunds would be paid directly to the broker. The debtor accepted the offer. The insurance company determined that it owed a premium refund of $89,417. The Court held that the debtor had assigned its rights to the premium refund and that the broker was entitled to the $89,417.
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Thursday, February 17, 2005