Opinion
May 29, 1939.
Walter B. Herendeen, for the Superintendent of Insurance of the State of New York, for the motion.
Maurice Finkelstein, for the State Mortgage Commission, opposed.
The fund to which the present application relates was never part of the security to which the certificate holders were entitled to resort for payment of their claims, and the decision of the United States Supreme Court in Ticonic National Bank v. Sprague (308 U.S. ___) is, therefore, inapplicable here. In Matter of Lawyers Mortgage Co. ( 22-34 Arden St.) ( 168 Misc. 810, 812), relied upon in opposition to this motion, this court, as its opinion indicates, granted the application of the trustee only "in so far as it seeks permission to apply the moneys distributable on the subordinate equity until full payment to the certificate holders of principal and interest at the guaranteed rate." The order which was entered on the decision was made without objection on the part of the liquidator and without the submission of a counter order.
In the court's opinion the final disposition of the $3,106.66 involved on the present application should be held in abeyance until it shall have been determined whether and to what extent the trustee and the certificate holders of the issue possess allowable claims against the liquidator. In the event that they do not possess any such claims, the money should be turned over to the liquidator. If, on the other hand, they do possess valid claims, the fund should be used for the purpose of paying such claims before any part thereof is paid to the liquidator.
The motion is accordingly denied, but without prejudice to a renewal after the final determination of the claims of the trustee and of the certificate holders of the issue against the liquidator.