Obstetric and Gynecologic Associates of Iowa insurance payment brings objection

Chicago, Nov. 21 – Obstetric and Gynecologic Associates of Iowa City received a payment of $12 million from insurer MMIC, Inc. that has drawn an objection and raised conflict between the debtor and the prime creditor, S.K., a legally incapacitated minor with Thomas T. Tarbox listed as his conservator.

S.K. has been granted a $75,652,549 judgment pending appeal, a judgment that necessitated the clinic’s bankruptcy filing.

Relating to the claim of S.K., MMIC has paid out $12 million to the clinic.

The creditor is arguing that the $12 million payout should be paid directly to the creditor as part of the judgment.

The clinic’s lawyers argue that the judgment is prepetition and that there is an automatic stay against such an insurance payment being paid to the creditor. The $12 million payment should be/is considered part of the estate.

The creditor sought the sheriff’s help in demanding that the clinic turn over the $12 million payout.

The debtor is asking the court for help in protecting the clinic from further expense of defending previous state court action, to halt proceedings of contempt regarding a turnover of the debtor’s property outside of the bankruptcy courts and to cease continued harassment and aggression of the debtor by the judgment creditor.

The obstetric and gynecologic clinic is based in Coralville, Iowa. The Chapter 11 case number is 22-01174.

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