The New Jersey Supreme Court has denied motions by indenture trustees of several industrial revenue bond issues backed by Mutual Benefit Life Insurance Co., the insurer announced Friday.
The motions sought to appeal rulings by the New Jersey Appellate Division and the Superior Court of Mercer County that said the state has broad jurisdiction over Mutual Benefit's assets.
The trustees, Citizens & Southern National Bank of South Carolina, First Tennessee Bank N.A., and Maryland National Bank, asked the state Supreme Court to permit appeal of a July 8 Appellate Court decision.
The Nov. 5 decision by the high court affirmed a previous order barring indenture trustees from bringing state foreclosure actions against real property owned by Mutual Benefit. The properties are owned by the insurance company through partnerships for which Mutual Benefit issued a guarantee of the partnerships' industrial revenue bonds.
The trustees had sought to foreclose on the properties because the insurer has said it will no longer make up interest shortfalls on projects for which cash flow is insufficient to cover them.
Mutual Benefit, which was taken over by New Jersey insurance regulators in July 1991, filed a rehabilitation plan this past August. If the plan is approved in its current form, the company will not honor guarantees on the tax-exempt bonds it secures.