Steve Poizner, Insurance Commissioner of the State of California, in his capacity as Trustee of the Mission Insurance Company Trust, the Mission National Insurance Company Trust and the Enterprise Insurance Company Trust ("Insurance Commissioner"), hereby submits this Status Report and advises the Court as follows:

1.   Developments in the Case

   During the last status conference, counsel for the Insurance Commissioner advised the progress on the collection of sums under the proof of claim against the Holland-America Insurance Company Trust. This proof of claim is expected to result in a recovery in excess of fifty million dollars for the Mission Insurance Company Trust, which will then in turn be able to pay claims of its own general creditors. The Missouri Receiver's counsel advises that since the last status report, the remaining proofs of claims have been wound up in the Holland-America Insurance Company Trust estate, so that a motion to approve a distribution is imminent. Contrary to the California Insurance Commissioner's expectation, however, the distribution has not yet been made. Counsel for Holland-America Insurance Company Trust advises that they hope to make a motion to their Missouri receivership court for distribution so that funds are distributed prior to year-end.

   The case plan submitted in March by the undersigned projected an October 31, 2009 Motion to approve a further distribution. This motion will be delayed until the Missouri Receiver makes its distributions.

2.   The Remaining Wind-up Tasks: Collection of the Sums due to the Trusts and
   Distribution of the Sums Collected to the Claimants

   The case is in final wind-up pursuant to a closing order. This report will update status on what will be required, when it will be required, and how it will be accomplished to complete the winding-up.

   1.   The Collection of Sums due to the Trusts

      In this case, substantial litigation to collect assets for the trusts has been completed. The Trusts now are owed sums by a number of insolvent entities, which are themselves subject to various proceedings throughout the world. The key sums due are as follows:

      1.   Holland-America Insurance Company Trust Claim

         This Missouri company is one of the affiliates of the Mission Insurance companies, and is in Receivership proceedings in Missouri. Mission Insurance Company Trust has a substantial approved claim in the Missouri receivership proceeding. As described above, the next key event in this estate is this distribution. This is the most substantial remaining asset owed to the Mission Insurance Company Trust. A 2009 distribution of this asset would permit a further distribution to claimants.

      Reinsurance Debtors Owe Sums to Mission Insurance Company Trust

      The Mission Insurance Company Trust is owed money by insurers in rehabilitation or liquidation. One substantial proof of claim is approved in the Centaur Insurance Company estate, a rehabilitation in Illinois. The Conservation and Liquidation Office has been in touch with the Illinois Special Deputy's office to try to get a firm date for the likely distribution from Centaur, but no firm date has yet been forthcoming. Another reinsurer, Universal Ruckversicherungs, is a foreign insolvency in its final stages, is expected to make a further dividend in the near future. Future reinsurance collections could exceed ten million dollars. No further information as to the timing of these distributions has been received since the last status conference.

   2.   The Timing Issues Posed by the Tax Concerns

      The Mission estates are currently grantor trusts of subsidiaries of Covanta Holding Corporation ("Covanta"). As a result, the income or loss allocable to the Mission estates is included in the consolidated federal income tax return filed by Covanta. Under the Tax Sharing Agreement between the Mission estates and Covanta, Covanta is liable to pay for all federal income taxes allocable to the estates for taxable years beginning in 2004.

      Nevertheless, under 31 U.S.C. 3713(a)(1)(A), a claim of the United States Government shall be paid first when a taxpayer indebted to the government is insolvent and either (i) the debtor makes a voluntary assignment of property to some other party without retaining enough property to pay all debts or (ii) an act of bankruptcy is committed. Under 31 U.S.C. 3713(b), a representative of an insolvent taxpayer paying any part of a debt of a person or estate before paying a claim of the government is liable to the extent of the payment for unpaid claims of the Government. Courts have interpreted this provision as causing personal liability on behalf of the representative if the personal representative distributed assets of the estates which rendered the estate insolvent and the distribution took place after the personal representative had notice or knowledge of the unpaid claims of the U.S. See Allen v. Commissioner, T.C. Memo 1999-385 (1999). The Insurance Commissioner lacks notice of such claims. The Insurance Commissioner believes that Covanta will be required to meet, and will meet, any unexpected contingencies associated with Covanta's primary obligation for taxes due. However, as a matter of conservatism, the Insurance Commissioner has reserved against the contingency. Consequently, the Mission Insurance Company Trust and Mission National Insurance Company Trust are currently retaining assets on account of the possibility that additional federal income taxes will be owed by the estates. In general, the statute of limitations on assessment closes three years after the tax return was filed (whether or not such return was filed on the date prescribed by law). Internal Revenue Code Section 6501. Corporate returns generally can be filed no later than September 15^th for the previous taxable year for a corporate taxpayer maintaining its tax records on the basis of a calendar year (which is the case for the parties involved). In general, tax returns must be filed, despite the liquidation process, for all years ending with the taxable year in which the final distribution is made. Internal Revenue Code Section 6012.

      The Insurance Commissioner continues to project that the most substantial portion of these assets will be released by the estates and distributed to creditors no later than year-end 2011, and that most of the remaining amounts will be distributed in 2012 through 2014. As of year-end 2014, the statute of limitations on assessment for federal income taxes will remain open for 2011 and later taxable years. Some assets will still need to be available in the event there is additional tax liability until the statute of limitations for 2014 has expired, but the Insurance Commissioner believes he can develop a solution whereby the assets in question can be held, so as not to prevent the estates from being closed as of year-end 2014, and hopefully even earlier.

      Therefore, it is anticipated that the Mission and Mission National estates can be closed by year-end 2014, although as described above, it may be necessary to retain a minimal amount of assets in the unlikely event that there is additional federal income tax liability until all of the taxable years are closed for purposes of assessment by the Internal Revenue Service.

3.   Insurance Commissioner's Time Line for Wind-up

   Late 2009/early 2010) (revised from October in light of the Missouri distribution situation) - Approval will be sought to distribute all sums collected in 2009 above tax and closing reserves;

   5. October 31, 2010: Approval will be sought to distnbute all sums collected in 2009 above tax and closing reserves;

   6. October 31, 2011: Approval of the Court to distribute the vast majority of the remaining assets of the trusts shall be sought, as the tax contingencies will in the main have expired.

   7. Final reserve distribution: Assuming that no tax issues arise, a small sum will be required to be reserved for potential tax issues as to which the statute of limitations has not yet expired. This is projected to be a small fraction of the funds now being held, and current projections are that this small fraction will be distributed either to claimants or to a trust for the benefit of claimants by 2014.

4.   Financial Status of the Trusts

Attached as Exhibit "A" is a statement of assets and liabilities for the Trusts.