Tenco Excavating, Inc. v. First Sealord Surety, Inc.

OPINION BY

Judge LEADBETTER.

In this adversary proceeding ancillary to the liquidation of First Sealord Surety, Inc. (First Sealord or FSS), Tenco Excavating, Inc. (Tenco), as a limited in-tervenor, has filed a Complaint against the Liquidator of First Sealord. Tenco alleges that cash in First Sealord’s operating accounts at the time of liquidation included cash deposited by Tenco to indemnify First Sealord in the event of losses on Tenco’s performance bonds, and subsequently was improperly diverted. Tenco maintains that the cash is “collateral,” which is not part of the liquidation estate.…