Previously Posted Information

Frequently Asked Questions 8-9-06

Frequently Asked Questions 5-24-06

Friday, January 25, 2008: After two years of litigation and disputes between the Liquidator of PrimeGuard (“Liquidator”) and the shareholders of PrimeGuard Insurance Company, Inc., A Risk Retention Group (“PrimeGuard”) and its affiliated companies, First Assured Warranty Corporation (“First Assured”), Warrantee Wise, Inc. and 1SourceAutoWarranty.com, Inc., a tentative settlement (“Shareholder Settlement”) was reached on December 19, 2007.

This Shareholder Settlement must be approved by both the Federal Bankruptcy Court in Colorado and the Liquidation Court in Hawaii in order to be finalized. Requests for approval were filed with the respective courts on January 11, 2008.

If the Shareholder Settlement is approved by both courts, then we will proceed with the liquidation of PrimeGuard and First Assured claims in Hawaii. If it is rejected by either or both courts, then the Liquidator will need to assess the available options to protect the interests of PrimeGuard’s claimants, and take appropriate action.

  1. In summary, the Shareholder Settlement provides for the following:(1) terminates the Federal bankruptcy proceedings of First Assured and requires First Assured and its affiliates to be resolved in the PrimeGuard Liquidation proceeding in Hawaii;(2) benefits the consumers and warranty contract holders in that it ensures that their claims will be resolved in a single proceeding under the jurisdiction of the PrimeGuard liquidation court in Hawaii, whether such claims were filed with the Liquidator in Hawaii or with the First Assured Bankruptcy Trustee in Colorado; and

    (3) resolves pending and potential litigation between the Liquidator and the shareholders of PrimeGuard, First Assured and its affiliated companies, resulting in substantial savings in the avoidance of future fees, costs and delays associated with such potential litigation.

Details of the Shareholder Settlement and the notices and pleadings filed with the respective courts can be viewed by clicking the following links:

Liquidator’s Filings with the Liquidation Court in Hawaii:

Liquidator’s Petition for Final Order and Judgment Approving Liquidator’s Settlement with Shareholders’ Family and Affiliates and Petition for Good Faith Determination of Settlement; Memorandum in Support of Petition; Declaration of Special Deputy Liquidator Paul S.K. Yuen; Exhibit “A”; Notice of Hearing and Certificate of Service; Proposed Order

Liquidator’s Petition for Final Order

Supplemental Exhibit “A” to Liquidator’s Petition for Final Order and Judgment Approving Liquidator’s Settlement with Shareholders’ Family and Affiliates and Petition for Good Faith Determination of Settlement filed January 14, 2008

Supplemental Exhibit “A” to Liquidator’s Petition

Notice of Hearing Re: Liquidator’s Petition for Final Order and Judgment Approving Liquidator’s Settlement with Shareholders’ Family and Affiliates and Petition for Good Faith Determination of Settlement

Notice of Hearing Re: Liquidator’s Petition
First Assured’s Filings with the Federal Bankruptcy Court in Colorado:

Debtor’s Motion for Order Approving: (I) Compromise of Controversy with the Insurance Commissioner for the State of Hawaii; and (II) Conditional Dismissal of the Bankruptcy Case

Debtors Motion to Approve Settlement

Exhibits A, B, and C to Debtor’s Motion for Order Approving: (I) Compromise of Controversy with the Insurance Commissioner for the State of Hawaii; and (II) Conditional Dismissal of the Bankruptcy Case

Debtors Motion to Approve Settlement Exhibits

Notice of Debtor’s Motion for Order Approving: (I) Compromise of Controversy with the Insurance Commissioner for the State of Hawaii; and (II) Conditional Dismissal of the Bankruptcy Case

Notice of Debtors Motion to Approve Settlement

The Liquidator’s Petition will be heard on March 5, 2008, at 8:30 a.m. (Hawaii Standard Time) before the Honorable Judge Victoria S. Marks, in her courtroom located at Kaahumanu Hale, 777 Punchbowl Street, Honolulu, Hawaii 96813. Any objection to the Liquidator’s Petition must be filed within 25 days of the mailing of the Notice. If no objection is received within 25 days of the mailing of the Notice, the court may approve the settlement without a hearing.

Thursday, February 22, 2007: The Liquidator is currently processing and evaluating all claims that have been filed with him in conjunction with the liquidation of PrimeGuard Insurance Company. Upon completion of the Liquidator’s evaluation of each claim, a Notice of Determination will be mailed to each claimant, which will disclose the Liquidator’s determination of the value of each claim. The Notice of Determination will also include information about what claimants can do if they disagree with the valuation of their claim and the next steps for getting paid.

Tuesday August 8, 2006: On June 16, 2006, First Assured Warranty Corporation (“FAWC”) filed for Chapter 11 Bankruptcy with the U.S. (“Federal”) Bankruptcy Court in Denver, Colorado. FAWC has claimed that 1SourceAutoWarranty.com, Inc. (“1Source”) is an affiliate and also part of its Federal bankruptcy proceeding. On or about June 27, 2006, FAWC sent out a “Notice of Chapter 11 Bankruptcy Case, Meeting of Creditors and Deadlines” to its creditors, including consumers who purchased Vehicle Service Agreements and Extended Service Agreements (collectively, “Service Contracts”) issued by FAWC and its warranty contract affiliates including 1Source. In the Federal bankruptcy proceeding in Colorado, FAWC and its affiliates seek to discharge their liabilities and assets, if any, and distribute the proceeds to creditors, including consumers who purchased Service Contracts.

On December 19, 2005, Mr. J.P. Schmidt, Insurance Commissioner for the State of Hawaii, was appointed as the Liquidator of PrimeGuard Insurance company, Inc. (“PrimeGuard”) by the Hawaii State Court. As you may know, PrimeGuard, another affiliated company of FAWC, insured a majority of the Service Contracts sold by FAWC and 1Source.

The Federal bankruptcy proceeding in Colorado and the State liquidation proceeding in Hawaii are two SEPARATE and DISTINCT proceedings.

If you have a claim against PrimeGuard, FAWC or 1Source, you should follow the instructions on the respective notices that you may have received from the Federal bankruptcy court in Colorado and the State liquidation court in Hawaii.
At this time, you must file a separate claim with both the Federal bankruptcy court in Colorado and the State liquidation court in Hawaii by any applicable deadlines, in order to have it considered by each court. Thus far, only the State liquidation court in Hawaii has established a deadline to file claims.

In response to FAWC’s filing for Federal bankruptcy in Colorado, the Liquidator appointed by the Hawaii liquidation court (“Hawaii Liquidator”) filed formal motions to dismiss FAWC’s Federal bankruptcy petition and for relief from the Federal bankruptcy stay. These motions would essentially allow for all claims under the Service Contracts, to be addressed in a single forum before the State liquidation court in Hawaii.

The Hawaii Liquidator believes that addressing all claims arising from the Service Contracts in the Hawaii liquidation proceeding will be more cost efficient for claimants, less confusing, and provide greater protection for purchasers of Service Contracts. Given the fact that PrimeGuard, as an insurance company, is federally prohibited from liquidating its estate in the Federal bankruptcy court in Colorado and can only liquidate its estate in the State liqidation court in Hawaii, proceeding in two separate forums (i.e. the Federal bankruptcy court in Colorado and the State liquidation court in Hawaii), is less cost efficient and creates more confusion for purchasers of Service Contracts.

Hearings on the Hawaii Liquidator’s motions are scheduled to be heard by the Federal bankruptcy court judge in Colorado on August 17 and 18, 2006.

Because of FAWC’s Federal bankruptcy filing in Colorado, the Hawaii Liquidator has received numerous inquiries regarding the effect the Federal bankruptcy will have on their claims arising from their purchase of a Service Contract. The Hawaii Liquidator and the State of Hawaii Insurance Division cannot provide any legal advice to a claimant.

For official information about the Federal bankruptcy proceedings in Colorado, you should refer to the U.S. Bankruptcy Court website at the following address: http://www.cob.uscourts.gov/firstwarranty.asp

Wednesday, May 24, 2006: The First Circuit Court of the State of Hawaii approved the official claims filing procedures and forms, as well as, established November 30, 2006 as the deadline for the filing of claims with the Liquidator. Hardcopies of the applicable notice, forms and instructions were mailed to potential claimants via the U.S. Postal Service. Electronic copies of the mailing can be viewed or downloaded from the links below.

  1. NOTICE OF LIQUIDATION ORDER AND PROCEDURES FOR FILING CLAIMS. This document contains information regarding the liquidation and claim filing procedures. Please see FAQs for answers to commonly-asked questions.Notice of Liquidation Order and Filing of Claims 5-18-06
  2. INSTRUCTIONS FOR COMPLETING CLAIM RESPONSE FORM. This document contains general instructions for completing the official Claim Response Form. Properly completed and executed original hardcopy of official Claim Response Forms must be RECEIVED by the Liquidator by November 30, 2006. Otherwise, the claim may be disallowed and forever barred. Forms submitted to the Liquidator via fax, or email will NOT be accepted as valid potential claims against the estate. Please see FAQs for answers to commonly-asked questions.Instructions for Claim Response Form
  3. CLAIM RESPONSE FORM. This is the official form that must be completed by potential claimants and sent to the Liquidator, along with any supporting documentation. Even if you have previously contacted the Liquidator’s Office or Insurance Commissioner’s office and believe that you have already submitted a claim, the Liquidator must receive your Claim Response Form with all supporting documentation by NOVEMBER 30, 2006 for you to be eligible to receive a distribution from the PrimeGuard estate. Please see FAQs for answers to commonly-asked questions.Official Claim Response Form
  4. NOTICE OF FILED PLEADING. The Liquidator has filed his Motion to add First Assured Warranty Corporation and 1SourceAutoWarranty.com, Inc. as Respondents in the liquidation proceedings of PrimeGuard Insurance Company, Inc. Please see FAQs for answers to commonly-asked questions.Notice of Filed Pleading 5-18-06

Tuesday, February 7, 2006: Effective Tuesday, 02/07/2006, the toll free telephone number for inquiries relating to the liquidation is (800)406-6144.

Monday, January 1, 2006: On January 9, 2006 the Liquidator for PrimeGuard Insurance Company issued a “Notice of Liquidation Order” which provides potential claimants with general background information about the liquidation proceeding and the cancellation of warranty contracts insured by PrimeGuard. A hardcopy of the Notice is also being mailed to potential claimants via USPS. A copy of the notice can be downloaded by clicking the link below.

Notice of Liquidation Order 1-9-06

Thursday, December 21, 2005: The Insurance Commissioner of the State of Hawaii issued “Cease and Desist” Orders to 1SourceAutoWarranty and First Assured Warranty Corporation prohibiting them from conducting the business of a service contract provider pursuant to Hawaii laws, and from selling or offering for sale any service contract that is purportedly insured by PrimeGuard Insurance Co., Inc. Copies of the respective Cease and Desist Orders can be downloaded by clicking the link below.

1Source-Cease&Desist

FirstAssured-Cease&Desist

Monday, December 19, 2005: The Circuit Court of the State of Hawaii issued an “Order of Liquidation” against PrimeGuard Insurance Co., Inc. A copy of the Order can be downloaded by clicking on the link below.

Order of Liquidation

The Order of Liquidation was granted because of PrimeGuard’s insolvency and hazardous financial condition. The liquidation proceedings generally provide for an orderly identification of past and potential future claims against the estate, as well as, the identification and consolidation of available assets that may be used to satisfy the liabilities of estate. The Insurance Commissioner of the State of Hawaii has been appointed as the Liquidator of the estate, and has the authority and responsibility to take possession of the assets of PrimeGuard and administer them under the supervision of the Court.

The Liquidator will be utilizing documents and records of PrimeGuard and its insured warranty administrators, as well as, inquiries that have been made directly with the State of Hawaii Insurance Division via voice mail, email, facsimile transmission, or regular mail, to identify potential claimants.

Upon approval of the claim filing plan and forms by the Court, the Liquidator will contact potential claimants with specific information about the filing of claims, including but not limited to, what needs to filed, how it should be filed, and when it has to be filed by. Potential claimants may be contacted by the Liquidator via direct mail, or by general notification via appropriate publications in locations where potential claimants may be resident, and this website.

Once the claims have been received, they will be reviewed and verified to the Court, who will then make a determination on when and how much can be disbursed to each claimant.