SPOKANE, Wash. -- Regulators in Idaho and Arizona have approved a plan to sell two insurance affiliates of failed Metropolitan Mortgage & Securities Co.
If approved by U.S. Bankruptcy Judge Patricia Williams, creditors could receive a share of as much as $20 million from the sales of Old West Annuity and Life Insurance Co. and Old Standard Life Insurance Co.
Insurance regulators in Arizona and Idaho seized control of the companies in March 2004 and operated them under receivership.
Met Mortgage and its Summit subsidiary filed for Chapter 11 bankruptcy protection in February. The collapse of Met Mortgage, once a $2.7 billion conglomerate of insurance companies and investment services, cost more than 10,000 investors some $450 million.
The deal with Cincinnati-based Great American Life Insurance Co., purchaser of the two insurance affiliates, affects 6,600 people who hold notes of Summit Securities, the Metropolitan subsidiary that handled Idaho insurance business.
Bond holders in Arizona and Idaho stand to collect a share of the $12 million to $20 million from the sale, said Maggie Lyons, acting CEO for Met Mortgage.
"We're very pleased," said Kevin O'Rourke, an attorney representing Summit creditors. "The alternative was those companies going into liquidation, which would have meant creditors get nothing for those valuable assets."
Washington insurance regulators are still trying to find a buyer for Metropolitan's third and largest insurance affiliate, Western United Life Assurance Co.
The sale of the Idaho and Arizona affiliates will not adversely affect Western United, said Bill Ripple, a spokesman for Washington state Insurance Commissioner Mike Kreidler, who had said he hoped to sell the three insurance affiliates as a package.
Money from the sale of Western would go to the more than 10,000 noteholders of Metropolitan.