PLEASE TAKE NOTICE THAT ON THE 8^th day of November, 2005, at the hour of 8:30 a.m., or as soon thereafter as the matter may be heard, John Garamendi, Insurance Commissioner of the State of California, in his capacity as Trustee of the Mission Insurance Company Trust, will appear before Department 50 of the Superior Court of Los Angeles County, California, and present a Motion to Authorize a Closing Procedure for the Mission Insurance Company Trust, and would show:

1. Mission Insurance Company was placed into liquidation on February 24, 1987. The assets of Mission Insurance Company have been, in the main, marshaled, and the creditor claims of that insurance company have been valued or are in the process of final valuation. See Declaration of Mohsen Sultan. The assets of Mission Insurance Company have been placed into the Mission Insurance Company Trust by previous court order.
2. This Court has previously approved interim distributions to approved creditors of Mission Insurance Company in the amount of seventy two percent (72%). See Declaration of Mohsen Sultan. The Insurance Commissioner now moves this Court to authorize a closing procedure to close the Mission Insurance Company Trust estate.
3. The Insurance Commissioner proposes that the closing of Mission Insurance Company Trust shall take place in two phases. The first phase shall be a distribution of most of the assets of the Mission Insurance Company Trust. The Insurance Commissioner has calculated that claimants who are Class Five under California Insurance Code Section 1033 (as it existed in 1987), i.e., the policyholder class, should receive an immediate distribution to bring each claimant’s distribution percentage up to one hundred percent (100%) of the amount of their claim. Because the distribution to policyholder class claimants will reach one hundred percent (100%), the Insurance Commissioner shall also request a distribution to general creditors on their claims. This distribution will not be of all the assets of the trust. A significant reserve shall be retained for matters not yet fully liquidated, including the Georgia-Pacific Corporation proof of claim (an appeal from the rejection of which is now pending in the California Supreme Court), the Industrial Trucking Service Corporation matter (which is now on remand to this Court after a reversal by the Court of Appeal), various tax contingencies, and other matters.

   The reserve to be retained in the trust shall be a substantial sum, to be distributed after the passage of time, to permit the case to be closed consistent with the contingencies. The Insurance Commissioner is optimistic that the remaining claims matters will be resolved by the time of the final hearing, but will request appropriate relief in the alternative in the resulting orders if the case must remain open to deal with pending appeals. In such an event, the Insurance Commissioner will seek an order which permits the distributions to the general creditors, pending these resolutions.

4. The Insurance Commissioner requests that this Court set a final hearing at which this Court shall consider a request by the Insurance Commissioner that the Court enter an order which does each of the following:
   1. settles and approves the final accounting of the Insurance Commissioner;
   2. affirms the distribution of Covanta shares pro rata to all unpaid creditors, on such schedule as may be devised in connection with the hearing;
   3. settles the final accounts of the Insurance Commissioner and discharge the Insurance Commissioner as Trustee and as Liquidator as to the accounts;
   4. authorizes the closing of the Mission Insurance Company case, subject to this Court’s continuing jurisdiction should further unanticipated collections be received after the date of closing, which will necessitate a further distribution;
   5. sets the deadline for any oppositions to be filed twenty one days prior to the final hearing date, and any replies by the Insurance Commissioner to be filed seven days prior to the final hearing date, with service by expedited service upon the service list;
   6. authorizes the Insurance Commissioner to take such steps as are necessary and appropriate to close the proceedings by the final date set by the Court;
   7. discharges the Liquidator and Trustee;
   8. authorizes the Trustee to maintain the records of Mission Insurance Company Trust for three years, after which such records may be destroyed in the Trustee’s discretion;
   9. enter an order that the Trustee and Liquidator shall have no liability of any kind or nature arising from the activities prior to or during the liquidation of Mission Insurance Company and the Mission Insurance Company Trust.
   10. authorizes the Insurance Commissioner to immediately destroy a group of old computer data tapes no longer used by the trusts but kept in storage at trust expense; and
   11. to implement document retention policies which permit the eventual destruction of such other records as the Insurance Commissioner may determine appropriate.

   The Insurance Commissioner may further request that the order setting the hearing address other related issues regarding the closing procedure as to the matters set forth above.

   In connection with this motion, the Insurance Commissioner will request that the trusts remain open for the collection of such additional funds and distributions as may be received by the Trusts for a period of some years after the order. The Insurance Commissioner will request the Court to retain jurisdiction over these proceedings, and enter an order closing these proceedings, subject to re-opening these proceedings for a subsequent further distribution. In connection with the closing procedures, the Insurance Commissioner will request that this Court authorize the Insurance Commissioner to authorize the withholding of a substantial reserve from the early 2006 distribution, in order to ensure that all contingencies are adequately reserved against. The Insurance Commissioner anticipates a further distribution will be required, in some years, for which this Court is requested to retain continuing jurisdiction.

   The Insurance Commissioner further shall request this Court to authorize publication of the order setting the final distribution motion in national publications and California newspapers, as well as the Insurance Commissioner’s website. The cost will vary depending on the ultimate notice to be given, but is estimated to exceed three hundred thousand dollars ($300,000).

   This motion is based upon California Insurance Code Sections 1011-1057, and the attached points and authorities. A Declaration of Mohsen Sultan filed with this motion provides evidence in support of this motion.

   Respectfully submitted,

   	Wisener * Nunnally * Gold, LLP
   	Robert H. Nunnally, Jr.
   	SBN 134151
   	Harold B. Gold
   	SBN 93848
   	625 West Centerville Road, Suite 110
   	Garland, Texas 75041
   	(972) 840-9080
   	Facsimile: (972) 840-6575

   
   

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   Memorandum of Points and Authorities

   The Insurance Commissioner’s case plan resulted in concrete effort to expedite the closing of these insurance insolvency trusts. This motion seeks the closing of the Mission Insurance Company Trust. Mission Insurance Company was placed into liquidation along with other Mission affiliates on February 24, 1987. The proof of claims deadline pursuant to California Insurance Code Section 1024 ran on September 12, 1987. The deadline to amend timely proofs of claim was August 18, 1995.

   The proofs of claims have been processed, and approved or rejected. Two order to show cause matters remain pending arising from such claims; Georgia-Pacific Corporation (now in the California Supreme Court) and Industrial Trucking Service Corporation (now in this Court). A few claimants are within the thirty day time period for potential challenges to a claims rejection pursuant to California Insurance Code Section 1032. The Court has previously approved interim distributions of seventy-two percent (72%) in this estate to policyholder class creditors. Now the time has come to begin the process of final wind-up of this aspect of this consolidated case.

   The Declaration of Mohsen Sultan establishes that enough assets exist to increase the policyholder distribution to one hundred percent (100%). The first order of business is to permit the Insurance Commissioner to make this distribution to policyholder class creditors under California Insurance Code Section 1033.

   Sufficient funds also exist to permit the distribution of funds to general creditors in part payment of their claims. The Insurance Commissioner proposes that the distribution in early 2006 provide for a dividend to general creditors. Prior to final hearing, this Court will be provided with final accounting, including the percentage of distribution for general creditor claims.

   The Insurance Commissioner also will seek leave to distribute the Covanta Holding Corporation (“Covanta”), formerly known as the Danielson Holding Corporation, shares. In this case, Covanta entered into a transaction with the Liquidator that required that all unpaid creditors, including general creditors, receive shares in return for their debt.

   The Mission Companies’ assets were transferred, after Court approval of the Final Order of Rehabilitation on April 20, 1990, into separate liquidation trusts as part of a rehabilitation plan in which Covanta participated in a reorganization plan for the various Mission Insurance Group affiliates. The Mission Companies’ Trusts received substantial benefits from this transaction, including stock in Covanta. The ultimate distribution of this stock to general creditors will be made on a pro rata basis.

   The Insurance Commissioner has broad powers under California Insurance Code Section 1037, whose exercise this Court reviews only for abuse of discretion. In re Executive Life Ins. Co., (1995) 32 Cal. App. 4^th 344. The Insurance Commissioner’s ultimate duty is to collect the assets and distribute them ratably among creditors. W. J. Jones & Sons v. Independence, (1942) 52 Cal. App. 2d 374.

   The following steps remain for completion:

   1. distribution of the final assets;
   2. Covanta shares distribution;
   3. Steps to ensure tax and other regulatory compliance;
   4. a final closing motion authorizing final distribution; and
   5. miscellaneous closing activities.

   Thus, the Insurance Commissioner has proposed a phased closing plan, with notice of the final closing hearing to creditors and policyholders with approved claims. This will ensure that this insolvency case closes in good order this year. The Insurance Commissioner will also request at this final hearing each of the following forms of relief, in the form of an order which will:

   1. settle the final accounts of the Insurance Commissioner and discharge the Insurance Commissioner as Trustee and as Liquidator;
   2. settle and approve the final accounting of the Insurance Commissioner;
   3. affirm the distribution of Covanta shares pro rata to general creditors;
   4. authorize the closing of the Mission Insurance Company estate, subject to this Court’s continuing jurisdiction should further unanticipated collections be received after the date of closing, which will necessitate a further distribution;
   5. sets the deadline for any oppositions to be filed twenty-one days prior to the final hearing date, and any replies by the Insurance Commissioner to be filed seven days prior to the final hearing date;
   6. authorizes the Insurance Commissioner to take such steps as are necessary and appropriate to close the proceedings by the final date set by the Court;
   7. discharges the Liquidator and Trustee;
   8. authorizes the Trustee to maintain the records of Mission Insurance Company Trust for three years, after which such records may be destroyed in the Trustee’s discretion;
   9. enter an order that the Trustee and Liquidator shall have no liability of any kind or nature arising from the activities prior to or during the liquidation of Mission Insurance Company and the Mission Insurance Company Trust; and
   10. provides for records distribution.

   The Insurance Commissioner may further request that the order setting the hearing address other related issues regarding the closing procedure as to the matters set forth above.

   The Insurance Commissioner also requests that this Court retain jurisdiction to supervise additional distributions. Funds will be reserved in the trust and funds will be received in the trust, which will require a further dividend to general creditors. This Court therefore will close this case, but leave the Mission Insurance Company trust open. The Insurance Commissioner will move this Court to re-open the case, in approximately three years, to distribute any remaining collections.

   Conclusion

   The time has come to implement a closing process for Mission Insurance Company Trust. This Court is requested to grant this motion to begin the end of this phase of the case.

   
   

   	Wisener * Nunnally * Gold, LLP
   	Robert H. Nunnally, Jr.
   	SBN 134151
   	Harold B. Gold
   	SBN 93848
   	625 West Centerville Road, Suite 110
   	Garland, Texas 75041
   	(972) 840-9080
   	Facsimile: (972) 840-6575
   	Attorneys for the Insurance COmmissioner

   
   

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   DECLARATION OF MOHSEN SULTAN

   I, Mohsen Sultan, make this Declaration in San Francisco, California, under the penalty of perjury of the laws of the State of California, and state:

   1. I am Mohsen Sultan. I am an employee of the California Insurance Commissioner's Conservation and Liquidation Office ("CLO"). I am the Estate Trust Officer for the Mission Insurance Company Trust. I am over the age of eighteen years. I am competent to be a witness. I have personal knowledge of the facts to which I attest. I acquired my personal knowledge through my involvement in the events described herein.
   2. As the Estate Trust Officer for the Mission Insurance Company Trust, my responsibilities included marshaling the assets of the Trust and to determine the approved claims and asset distributions for that entity.
   3. I am also a person qualified to testify about the records of Mission Insurance Company. These records are kept in a systematic manner in the ordinary course of business, with entries logged into those records at or about the time that the events occur. I base my testimony as to historical matters upon the review of these records.
   4. Mission Insurance Company entered liquidation on February 24, 1987. The company was a California property and casualty insurance company. From that time to the present, the records of the company reflect that the following steps took place:
      1. litigation to collect reinsurance due, resulting in asset recoveries;
      2. proof of claim notices were sent out to tens of thousands of policyholders and creditors;
      3. numerous proofs of claims were received and processed, including the litigation of the Insurance Commissioner’s adjudication of claims;
      4. guaranty association claims were processed and valued;
      5. interim distributions were made to approved policyholder class claimants;
      6. suits were settled with officers and with the company’s accountants;
      7. a rehabilitation plan resulted in the creation of the Mission Insurance Company Trust, and in a transaction which makes Covanta shares (formerly Danielson Holding Corporations shares) available for distribution.
   5. At my direction, notices will be sent by CLO to the policyholders, creditors and guaranty associations regarding this closing motion setting for Mission Insurance Company Trust.
   6. The Court is requested to authorize the distribution of the remaining assets of Mission Insurance Company Trust, less a substantial reserve to be held in the Trust to deal with expense and potential reserve items. This distribution will be in the amount of one hundred percent (100%) of approved policyholder claimants’ principal claims. Prior to the final hearing, a final accounting will be provided to include the percent of approved general creditors’ claims. Substantial reserves are being retained for future distribution, in light of pending claims appeals and in light of unforeseen contingencies, such as taxation matters.
   7. Upon the distribution of the assets, the Court is requested to authorize a declaration of compliance to be filed.
   8. In connection with the closing of this case, a number of additional findings and relief are requested, including the following. The Insurance Commissioner requests that this Court set a final hearing at which this Court shall consider a request by the Insurance Commissioner that the Court enter an order which does each of the following:
      1. settles and approves the final accounting of the Insurance Commissioner;
      2. affirms the distribution of Covanta shares pro rata to general creditors, on such schedule as may be devised in connection with the hearing;
      3. settles the final accounts of the Insurance Commissioner and discharge the Insurance Commissioner as Trustee and as Liquidator as to the accounts;
      4. authorizes the closing of the Mission Insurance Company case, subject to this Court’s continuing jurisdiction should further unanticipated collections be received after the date of closing, which will necessitate a further distribution;
      5. sets the deadline for any oppositions to be filed twenty one days prior to the final hearing date, and any replies by the Insurance Commissioner to be filed seven days prior to the final hearing date, with service by expedited service upon the service list;
      6. authorizes the Insurance Commissioner to take such steps as are necessary and appropriate to close the proceedings by the final date set by the Court;
      7. discharges the Liquidator and Trustee;
      8. authorizes the Trustee to maintain the records of Mission Insurance Company Trust for three years, after which such records may be destroyed in the Trustee’s discretion;
      9. enter an order that the Trustee and Liquidator shall have no liability of any kind or nature arising from the activities prior to or during the liquidation of Mission Insurance Company and the Mission Insurance Company Trust.
      10. authorizes the Insurance Commissioner to immediately destroy a group of old computer data tapes no longer used by the trusts but kept in storage at trust expense; and
      11. to implement document retention policies which permit the eventual destruction of such other records as the Insurance Commissioner may determine appropriate.
      12. to authorize publication of the order setting the final distribution motion in national publications and California newspapers, as well as the Insurance Commissioner’s website. The cost will vary depending on the ultimate notice to be given, but our initial estimate is that this will be in excess of three hundred thousand dollars ($300,000).
      The Insurance Commissioner may further request that the order setting the hearing address other related issues regarding the closing procedure as to the matters set forth above.
   9. In connection with this motion, the Insurance Commissioner will request that the trusts remain open for the collection of such additional funds and distributions as may be received by the Trusts for a period of some years after the order. The Insurance Commissioner will request the Court to retain jurisdiction over these proceedings, and enter an order closing these proceedings, subject to re-opening these proceedings for a subsequent further distribution. In connection with the closing procedures, the Insurance Commissioner will request that this Court authorize the Insurance Commissioner to authorize the withholding of a substantial reserve from the early 2006 distribution, in order to ensure that all contingencies are adequately reserved against. The Insurance Commissioner anticipates a further distribution will be required, in some years, for which this Court is requested to retain continuing jurisdiction.
   10. The above relief presents a way to close this case, and make a substantial distribution to claimants. This approach seeks to close the case, while recognizing that the trusts themselves must continue to function, in order to receive assets. In addition, due to the sums involved, the Insurance Commissioner must keep a substantial reserve in the Trust, to ensure that no unexpected events, including unexpected tax events, arise which create new issues for the Trusts. While one alternative is to keep this case open, the relief requested is to close this case, with the trusts remaining open and a substantial sum reserved from distribution, in order to protect against any unforeseen contingencies. The Court is requested to retain jurisdiction over the case, which would be re-opened for subsequent distributions until a final distribution is ultimately made and the trust fully distributed. The approach outlined in this declaration is a reasonable approach to achieve the Court’s and the Insurance Commissioner’s goal of closing this case, consistent with prudence.
   
   

   I hereby execute this declaration under the penalty of perjury of the laws of the State of California in San Francisco, California, on the 30^th day of September, 2005.

   	Mohsen Sultan
   	Mohsen Sultan