Texans Insurance CUSO Gets More Bankruptcy Relief
"Judge House gave TIG the relief it requested on the cash collateral motion. It is business as usual at TIG," said Jo Trizila, a spokeswoman at $1.7 billion Texans Credit Union.
Trizila said she could not provide further details on the cash collateral motion that took place on Oct. 8.
Prior to that hearing, Texans CUSO Insurance met in bankruptcy court on Sept. 10. On that day, among the relief granted by the court was approval to pay pre-petition commissions owed to its independent agents, approval to remit all insurance premiums to insurance carriers, approval to honor pre-petition wages and benefits of its employee and interim approval to utilize cash collateral, according to the CUSO.
At the time of its September hearing, Texans CU said it was negotiating a debtor-in-possession financing facility. The CUSO said it had sufficient cash to operate and the consent of its secured lender to use the cash for operations. The DIP financing was set to provide an immediate source of funds to the CUSO, enabling it to satisfy on-going expenses associated with the daily operation of its business, including the timely payment of employee wages and other business-related obligations.
During the Chapter 11 process, the CUSO said its suppliers were expected to be paid for post-petition purchases of goods and services in the ordinary course of business, the CUSO said. Payments of insurance premiums and commissions to agents should also continue without interruption. Insurance policies issued through Texans CUSO Insurance are unaffected by the filing and customers remain insured through their carriers, according to the CUSO.
The economic recession, the loss of business from construction industry clients, an unstable insurance market and expenses to fight legal battles were among the reasons Texans CUSO Insurance cited for forcing it to file for Chapter 11 bankruptcy protection.