Guarantors Ordered to Post $70 Million on Reinsurer's Behalf

TRENTON, N.J. - Pursuant to an interim arbitration award, a New Jersey federal judge has ordered the guarantors of a reinsurance contract to post on behalf of Founders Insurance Co. $70 million in security in favor of Everest National Insurance Co. Everest National Insurance Co. v. Sutton, No. 07-722 (D. N.J.).

Judge Joel A. Pisano of the U.S. District Court for the District of New Jersey on Aug. 13 ruled that the two guaranties are enforceable. He rejected the guarantors' position that they executed the guaranties under duress.

Centrix Financial, a company owned by Robert Sutton, underwrote and serviced sub-prime …