Michigan Court of Appeals Decision Limits Powers of an Insurance Receiver
After obtaining leave to pursue an emergency interlocutory appeal on an order compelling the sale of a $160 million insurance company in receivership, the Michigan Court of Appeals vacated the trial court’s orders in a victory for Clark Hill team members Ron King, Peter Kupelian, and Zach Larsen. The Court of Appeals determined that Chapter 81 of the Insurance Code did not grant the Michigan Commissioner of Insurance as Rehabilitator the authority to sell the stock of the company against the parent company’s consent.
The Court further vacated the trial court’s decision to grant specific performance under a Stock Purchase Agreement as the basis for the compelled sale, holding that the trial court erred by failing to determine whether “substantial justice” required another court to decide the breach-of-contract dispute and failing to take into account a choice-of-jurisdiction clause providing New York with jurisdiction over the matter. Thus, the Court remanded for such a determination. GBIG Holdings, Inc v Commissioner of Insurance and Financial Services, COA Docket No. 354182.