Bank is Secured Creditor, Okla. Appellate Court Rules in Dispute Involving Insolvent Reinsurer

OKLAHOMA CITY — An Oklahoma appellate court has reversed an order requiring a bank to turn over cash securing a letter of credit issued by a now insolvent reinsurer in order to secure its obligations under a quota share agreement, ruling that the bank was a secured creditor that was entitled to discharge its claim by resort to the security.

On Dec. 14, the Oklahoma Court of Civil Appeals, Division I, remanded the matter with instructions to grant the bank’s motion for relief from the stay of litigation to allow it to satisfy its secured claim from the cash collateral.