Receivership Petitions and Orders

On February 25, 2002, an Order of Conservation was entered against Gallant Insurance Company following the Department of Insurance’s determination that Gallant was insolvent by more than $21 million.

An Order of Liquidation was entered by the Circuit Court of Cook County, Illinois, against Gallant on August 9, 2002, subject to a fourteen day stay until August 23, 2002. The Order of Liquidation was entered on the Director’s motion for Judgment on the Pleadings, which was granted by the Circuit Court on August 7, 2002, based upon a duly authorized Consent to Liquidation executed by Gallant’s board of directors, which the owner subsequently refused to honor. On August 14, 2002, Gallant filed a Notice of Appeal of the Order of Liquidation.

An Agreed Order was entered by the Circuit Court of Cook County, Illinois on March 13, 2003, which contains a Finding of Insolvency and waives all rights to appeal, and further requires Gallant to dismiss with prejudice its pending appeal of the Court’s August 9, 2002, Order of Liquidation. The Appeal was dismissed on March 27, 2003. As of that date, the Liquidation Order and Finding of Insolvency became final.

The Department of Insurance has previously approved an arrangement for Affirmative Insurance Company to assume or reinsure all in-force business of Gallant effective January 1, 2002. As such, Affirmative is responsible for policy claims which occurred on or after that date. Affirmative is an Illinois domestic carrier and member of the Vesta Insurance Group of Birmingham, AL, and is licensed in 25 states including Illinois and Indiana.

Gallant is a wholly owned subsidiary of JP Holding Incorporated and a member of the Warrior Insurance Group of Bedford Park, Illinois. Gallant was originally incorporated in November 1977 as the Allied American Insurance Company. The current name was adopted in July 1995.

The company was licensed in the state of Illinois and Indiana, and primarily wrote non-standard passenger automobile liability and physical damage coverage.

The claim filing deadline was February 23, 2004. The deadline for liquidating timely filed contingent claims was August 23, 2004. Early access distributions totaling $14,848,671 have been made to various Guaranty Funds for administrative expenses and claim benefits.

On July 25, 2006, the supervisory court entered an order approving the Liquidator’s recommendation of a 100% dividend distribution to priority level (b) secured creditors, totaling $202,319.

On March 24, 2011, the Liquidator filed a petition seeking approval of the payment of a 100% dividend on all claims allowed at priority levels (a) - (d). The petition is scheduled to be heard by the court supervising the liquidation proceedings on March 28, 2011 and, if approved, the distribution will be issued shortly thereafter.

On March 28, 2011, the Supervising Court approved the Liquidator's petition to distribute a 100% dividend on all timely-filed claims recommended for allowance by the Liquidator at priority levels (a), (b), and (d) of the Illinois priority of distribution schedule, totaling $7,224,613.

On December 6, 2011, an order was entered approving a final distribution of $958,938.70 on timely filed claims allowed at level (g) of the distribution schedule, at the prorated dividend rate of 39.9581%.  The court's order also terminated the liquidation proceeding and closed the estate.