In re Liquidation of Legion Indemnity Company

In a liquidation matter, the Department of Insurance, acting as the liquidator, filed an action against claimant to recover amounts allegedly owed pursuant to reinsurance treaties the claimant had entered into with the insolvent company. The claimant counterclaimed for unpaid premiums and the arbitration panel ruled in favor of the claimant. Claimant filed a circuit court action seeking payment of the award and the trial court determined that the unpaid premiums as well as the attorney fees, costs, and arbitration interest were claims of a general creditor and were afforded the seventh highest priority in the Illinois Insurance Code’s priority distribution scheme. Claimant appealed, arguing that its claim for attorney fees, costs, and arbitration interest should be deemed a cost and expense of administration and receive the highest priority under the Insurance Code. Claimant also argued that it was entitled to statutory post-judgment interest under section 2-1303 of the Code of Civil Procedure. The appellate court affirmed, finding that the trial court did not err in its priority determination and that claimant was not entitled to post-judgment interest. (DELORT and LYLE, concurring)