NOTICE OF MOTION AND MOTION

PLEASE TAKE NOTICE that at 8:30 a.m. on October 12, 2005, in the Courtroom of the Honorable Gregory Alarcon, Department 36 of the Los Angeles Superior Court, at 111 Hill Street, Los Angeles, California 90012, or as soon thereafter as the matter may be heard, the Insurance Commissioner of the State of California, in his capacity as conservator, liquidator and rehabilitator (the "Commissioner") of Executive Life Insurance Company ("ELIC"), will and hereby does move the Court (the "Motion") for entry of an Order approving the distribution of $100 million of Altus Litigation Proceeds (as defined below) pursuant to the ELIC Rehabilitation Plan.

This Motion is made pursuant to the Conservation Order entered by this Court on April 11, 1991, the Order of Liquidation entered December 6, 1991, and the final orders entered in this case approving the ELIC Rehabilitation Plan. This Motion is based on the facts and legal argument set forth in the accompanying Memorandum of Points and Authorities and supporting Declarations of Willard Roberts, Karl Belgum and Lauren Roberson (all of which are incorporated by reference into the Motion and constitute a part of the Motion), all other pleadings and papers on file in this matter, and on such oral argument of counsel or evidence as may be presented at the hearing on the Motion.

MEMORANDUM OF POINTS AND AUTHORITIES

INTRODUCTION

This Motion seeks the Court's approval of the Commissioner's proposed distribution of $100 million of Altus Litigation Proceeds pursuant to the Rehabilitation Plan.¹ These funds, received pursuant to the District Court's order authorizing distribution of these funds to the Commissioner, derive from a settlement among Artemis S.A. ("Artemis"), various affiliates and individual representatives of that entity and the U.S. Attorney's office in criminal litigation. If the Motion is granted, the practical effect will be that approximately $31.9 million will be distributed to the Opt Out Trust, which in turn will effect a pro-rata distribution of such amount to the approximately 27,000 opt-out former policyholders who are the beneficiaries of the Opt Out Trust, and the other approximately $66.1 million will be distributed to Aurora National Life Assurance Company ("Aurora") for distribution and/or crediting by Aurora principally for the benefit of the approximately 300,000 opt-in policyholders, all as more specifically described below.2

The Commissioner has not typically sought authorization from the Court to effect distributions, and instead has relied on the final orders approving the Rehabilitation Plan as proper and sufficient authority for effecting distributions. However, the Commissioner is aware that certain parties have contended that the $100 million of Altus Litigation Proceeds now available for distribution should not be distributed pursuant to the Rehabilitation Plan, or that the Rehabilitation Plan requires a different distribution of these funds than the Commissioner believes is mandated by the Plan. In particular, the Commissioner is aware that the Participating Guaranty Associations ("PGAs"), through the National Organization of Life and Health Insurance Guaranty Associations ("NOLHGA"), believe that they have rights with respect to the funds being distributed that are not reflected in the distribution provided for in this Motion.

In light of the fact that the $100 million in Altus Litigation Proceeds presently available for distribution is a material amount, and that the Commissioner expects additional material Altus Litigation Proceeds to become available for distribution at a later date, the Commissioner has determined, out of an abundance of caution, that it is appropriate to bring this Motion to allow those who oppose the proposed distribution the opportunity to assert their positions to the Court before the distribution of the subject $100 million takes place.

I.
FACTUAL BACKGROUND REGARDING ALTUS LITIGATION PROCEEDS.

The Commissioner, acting on behalf of the ELIC estate, commenced a civil action in 1999 against various defendants, alleging that they had fraudulently and unlawfully obtained control over a California insurance company, ELIC's former bond portfolio and insurance assets in violation of Federal and state laws prohibiting a foreign government-owned bank from acquiring control of a California insurance company. Such action is now pending in Los Angeles in the U.S. District Court for the Central District of California (the "District Court"), styled as John Garamendi as Insurance Commissioner of the State of California and as Conservator, Rehabilitator and Liquidator of the Estate of Executive Life Insurance Company v. Altus Finance S.A., et al., Case No. CV 99-02829 AHM (CWx) (the "Civil Action"). Among the defendants in the Civil Action are Aurora, which is the new insurance company that received the Transferred Assets and issued the Restructured Policies under the Rehabilitation Plan, and Altus Finance S.A. ("Altus"), which is the entity that purchased and received the Transferred Bonds pursuant to the Rehabilitation Plan. The relief sought by the Commissioner in the Civil Action includes both damages and restitution based on fraud and conspiracy. Declaration of Karl Belgum ("Belgum Decl.") ¶7. Amounts actually collected by the Commissioner on account of any of the claims asserted in the Civil Action, whether as a result of judgment or settlement, are referred to in this Motion as "Altus Litigation Proceeds."

Following the initial filing of the Civil Action in the Conservation Court, its removal to the District Court, and the issuance of a tentative order by the District Court providing for a partial remand to the Conservation Court on the ground that the Conservation Court had exclusive jurisdiction over the claims against the non-"foreign sovereign" defendants, on July 26, 2000, Judge Lewin of the Conservation Court issued an Order permitting such claims in the Civil Action to proceed in the District Court. Belgum Decl. ¶¶4 & 5 and Ex. A & B. This enabled the Commissioner's claims in the Civil Action to proceed more efficiently in one forum, inasmuch as the claims against certain defendants held to be "foreign sovereigns" could only be maintained in District Court. There was not then and never has been any dispute that the claims in the Civil Action are ELIC estate assets being pursued by the Commissioner for the benefit of ELIC claimants, including both the contract holders who elected not to receive Restructured Policies from Aurora and instead chose to receive payments approximating the liquidation value of their former policies (the "Opt Out Contract Holders") and the former policyholders who elected to receive Restructured Policies from Aurora (the "Non-Opt Out Contract Holders"). Simply stated, the Conservation Court's decision to allow the claims asserted in the Civil Action to be liquidated in the District Court was based on judicial economy, and did not bespeak any intention to effect any modification to the Rehabilitation Plan regarding how ELIC estate assets, once liquidated, are distributed under the Rehabilitation Plan.

The Civil Action was consolidated for discovery and pre-trial purposes with two other subsequently commenced actions pending before the same District Court that have been brought by other plaintiffs (all three consolidated actions being hereafter sometimes collectively referred to as the "Civil Actions").3 Id. ¶6.

While the Civil Action was pending, the United States Attorney's Office for the Central District of California (the "U.S. Attorney") conducted a lengthy criminal investigation into the involvement of a number of parties, including Credit Lyonnais S.A. and Artemis, in various ELIC transactions undertaken in connection with the Rehabilitation Plan. The Commissioner provided substantial assistance to the U.S. Attorney during the investigation in the form of documentary evidence and testimony. At least some of the transactions that were the subject of the criminal investigation are also the subject of the Civil Action. Id. ¶8.

The criminal investigation resulted in grand jury indictments and the U.S. Attorney's filing of a criminal case in Federal court in Los Angeles against a number of entities and individuals, styled as United States v. Credit Lyonnais, et al., No, CR 03-760 DT (the "Criminal Case"). Id. On December 15, 2003, the U.S. Attorney entered into a Final Settlement Agreement (the "FSA") with Artemis in the Criminal Case. Pursuant to the FSA, Artemis was required to establish and fund a $185 million settlement fund (the "Settlement Fund") in exchange for the ultimate resolution of criminal charges against Artemis and various affiliated parties. Id. ¶9. The $185 Million Settlement Fund was paid by Artemis to the U.S. Attorney on or about March 11, 2004. Id. ¶10.

Most importantly for present purposes, the FSA also provided that $110 million of the $185 million Settlement Fund was to be unconditionally transferred by the U.S. Attorney to the Commissioner as a victim compensation payment for the benefit of the ELIC estate after the District Court presiding over the Civil Actions approved proposed payment instructions. More specifically, the FSA expressly provides:

Based on the foregoing provision, on April 9, 2004, the Commissioner filed with the District Court presiding over the Civil Actions a motion for an order approving the payment instructions and authorizing the $110 million victim compensation payment to be transferred to the Commissioner for the benefit of the ELIC estate (the "Payment Motion"). Belgum Decl. ¶12. In connection with such motion and at the request of the U.S. Attorney pursuant to the terms of the FSA, the Commissioner agreed that the $110 million amount to be disbursed to the Commissioner pursuant to the payment instructions would be credited in favor of the "Artemis Parties" (defined in the FSA to mean Artemis and various affiliated parties) against any amount that any of the Artemis Parties might be responsible to pay under a judgment or court-approved settlement in the Civil Actions. Id..

On May 5, 2004, the District Court in the Civil Actions issued its Amended Order granting the Payment Motion, expressly authorizing the payment of $110 million to the Commissioner for the benefit of the ELIC estate and providing that such amount shall be credited against any amount that any of the Artemis Parties become responsible for under any judgment or court-approved settlement in the Civil Actions. Id. ¶13 & Ex. D.4

Consistent with such Amended Order, the Commissioner received the $110 million payment from the U.S. Department of Treasury on May 25, 2004. Declaration of Willard Roberts ("Roberts Decl.") ¶2.

Of the $110 million received by the Commissioner pursuant to the Amended Order, the Commissioner has reserved $10 million for fees and expenses incurred in connection with the Civil Action. Roberts Decl. ¶¶3, 4. Accordingly, $100 million of the $110 million in Altus Litigation Proceeds received by the Commissioner to date is available for distribution pursuant to the Rehabilitation Plan. Id. (For ease of reference, such $100 million presently available for distribution is sometimes referred to herein as "the subject $100 million" or "this $100 million.")

Between June 2004 and the present, the Commissioner has refrained from seeking authorization from this Court to proceed with distribution of the subject $100 million based on the hope (and at times the expectation) that the pre-trial and trial phases and any resulting additional settlements in the Altus Litigation would proceed more quickly than has proved to be the case, which potentially would have produced some efficiencies by enabling additional Altus Litigation Proceeds to be collected before bringing this Motion so that such additional amounts could be included in this Motion. However, notwithstanding that substantial settlements with various defendants are pending and trial of the Civil Action against the one remaining non-settling defendant has nearly concluded, the Commissioner has determined that in light of the slow pace of finalizing the pending settlements and otherwise proceeding to judgment in the Civil Action, it is not appropriate to wait any longer to seek authorization to distribute the subject $100 million.5

As set forth in Part II immediately below, the subject $100 million constitutes an ELIC estate asset. The Commissioner believes it time to proceed with the distribution of this $100 million to the intended recipients, and brings this Motion to that end.

In order to understand why the subject $100 million (and, indeed, any additional Altus Litigation Proceeds, as well as the proceeds of any other claims asserted by the Commissioner for damages to ELIC's former policyholders) constitute ELIC estate assets that are covered by and distributable pursuant to the Rehabilitation Plan, it may be useful to the Court to summarize certain key aspects and provisions of the Rehabilitation Plan.

The first important principle under the Rehabilitation Plan is that the Commissioner retained as part of the ELIC estate all Retained Assets, as distinct from (1) the Transferred Bonds, which were transferred to Altus pursuant to the Bond Purchase Agreement and Section 6.1 of the Rehabilitation Agreement, and (2) the Transferred Assets, which were transferred to Aurora pursuant to Section 5.1 of the Rehabilitation Agreement (which Transferred Assets included the proceeds received by the Commissioner from the sale of the Transferred Bonds to Altus, as well as other specified assets). Virtually all other ELIC estate assets that did not expressly constitute Transferred Bonds and Transferred Assets fall within the definition of "Retained Assets" set forth in Section 5.4 of the Rehabilitation Agreement. This makes eminent sense because under the structure of the Rehabilitation Plan, the Retained Assets are liquidated by either the Commissioner or one of three Trusts created under the Plan, and, after payment of specified expenses and funding of specified reserves, are then distributed for the benefit of former ELIC policyholders under the Rehabilitation Plan, as explained more fully below.

In particular, two of the broad categories of Retained Assets clearly cover the claims asserted by the Commissioner in the Civil Action and any Altus Litigation Proceeds. These two categories within the definition of Retained Assets are: "(e) claims, suits, rights and choses in action, choate or inchoate, whether now asserted or not previously asserted, with respect to damages or injury to ELIC, its assets or Contract Holders . . . and (f) all other assets of ELIC, excluding the Transferred Assets and the Transferred Bonds . . . ." Rehabilitation Agreement §5.4. Category (e) covers all potential claims and causes of action, whether accrued or not, and whether known to exist or not, that relate to damages or injury to ELIC or its policy holders. The Civil Action clearly states claims related to damages or injury to ELIC or its policy holders and therefore is within the definition of category (e) of Retained Assets. See Belgum Decl. ¶7. In addition, even if category (e) did not exist, category (f) is a broad, residual "catch-all" that covers every type of asset not otherwise included in any of the other categories, except for Transferred Assets (i.e., assets transferred to Aurora pursuant to Section 5.1 of the Rehabilitation Agreement) and Transferred Bonds (i.e., assets transferred to Altus pursuant to Section 6.1 of the Rehabilitation Agreement). Thus, because the claims in the Civil Action and any Altus Litigation Proceeds are neither a Transferred Asset nor a Transferred Bond, they necessarily fall within residual category (f).

Next, it is important to understand how Retained Assets are liquidated and distributed under the Rehabilitation Plan for the benefit of former ELIC policyholders, including both Opt Out Contract Holders and Non-Opt Out Contract Holders (and, if applicable, their subrogees). In broad outline, Retained Assets, depending on their type, were either transferred to one of three grantor Trusts created pursuant to the Rehabilitation Plan - known as the Base Assets Trust, the Real Estate Trust, and the ELIC Trust - or retained by the Commissioner for liquidation. Any Retained Assets that were transferred to one of the three Trusts were liquidated by the applicable Trust and the net proceeds of liquidation available for distribution were then distributed by such applicable Trust in specified proportions to the Opt Out Trust (for the benefit of Opt Out Contract Holders) and to Aurora (to be credited or paid for the benefit of Non-Opt Out Contract Holders and, if applicable, their subrogees) as provided in the Rehabilitation Plan. See generally Articles 7, 10 and 12 of Rehabilitation Agreement, and Articles 10 and 17 of Enhancement Agreement.

Contingent and unliquidated litigation claims such as those ultimately asserted in the Civil Action were not the types of Retained Assets transferred to the Base Assets Trust or Real Estate Trust. Rather, the ELIC Trust was the main vehicle for liquidating miscellaneous assets and distributing their proceeds. Roberson Decl. ¶¶9, 10.6 While certain specified unliquidated litigation claims were transferred to the ELIC Trust, others were not, and the claims in the Civil Action were not among those transferred. See Agreement of Executive Life Insurance Company Trust, A Liquidating Trust, dated as of February 15, 1994, as amended (the "ELIC Trust Agreement"), Schedules A (listing "Excluded Assets," i.e., various Retained Assets not transferred to the ELIC Trust) and D (listing "Trust Retained Assets," i.e., Retained Assets transferred to the ELIC Trust). However, even though the claims pertaining to the Civil Action were not transferred to the ELIC Trust, under all circumstances the proceeds of such claims (including the $100 million of Altus Litigation Proceeds that are the subject of this Motion) are distributable pursuant to the same distribution provisions governing distributions by the ELIC Trust, for two related reasons.

First, to the extent a Retained Asset was not transferred to the ELIC Trust and was then liquidated by the Commissioner/ELIC, the Rehabilitation Plan provides that the ELIC Trust, so long as it is in existence, shall receive the net liquidation proceeds from the Commissioner/ELIC for distribution by the ELIC Trust pursuant to terms of the Rehabilitation Plan. See Rehabilitation Agreement §12.11.3; ELIC Trust Agreement §3.8.

Second, pursuant to companion motions of the Commissioner and the ELIC Trust filed in 1999,7 the above-captioned Court approved the termination of the ELIC Trust effective as of August 31, 1999 by Orders dated September 23, 1999 and November 15, 1999 (referred to, respectively, as the "September 23, 1999 Trust Termination Order" and the "November 15, 1999 Trust Termination Order," and collectively referred to as the "Trust Closing Orders"). Roberson Decl. ¶7. The ELIC Trust has long since been fully administered and terminated pursuant to the Trust Closing Orders. Id. ¶8.

Most important for present purposes, as part of the September 23, 1999 Trust Termination Order, the Court approved an amendment to the Rehabilitation Agreement providing that any amounts distributed by ELIC from the liquidation of assets after the termination of the ELIC Trust shall be distributed the same way as if they had been distributed by the ELIC Trust, such that the identical provisions of the Enhancement Agreement that governed distributions by the ELIC Trust before its termination also govern distributions by the Commissioner/ELIC after the termination of the ELIC Trust. See September 23, 1999 Trust Termination Order (entitled "Order Regarding Insurance Commissioner Of The State Of California's Motion For Approval Of Modifications To Rehabilitation Agreement Re: Executive Life Insurance Company"), approving amendments to Section 12.11.3 of Rehabilitation Agreement, as set forth in Exhibit 1 to the Declaration of Richard G. Krenz filed as part of the Commissioner's Motion For Approval Of Modifications to Rehabilitation Agreement Re Executive Life Insurance Company dated September 3, 1999.8

Thus, although the claims asserted in the Civil Action were Retained Assets that were not transferred to the ELIC Trust and thus were necessarily maintained by the Commissioner in the ELIC estate, all proceeds of the claims in the Civil Action (including the $100 million in Altus Litigation Proceeds that are the subject of this Motion) are distributable pursuant to the same provisions of the Rehabilitation Plan that governed any distributions by the ELIC Trust prior to its termination. Accordingly, we turn now to the proposed distribution under the relevant provisions of the Rehabilitation Plan, i.e., those governing distributions by the ELIC Trust.

Having already established that distribution of the subject $100 million of Altus Litigation Proceeds should follow the distributive provisions of the Rehabilitation Plan applicable to a distribution by the ELIC Trust, the first step is to determine the portion that is distributable to the Opt Out Trust. Under the Rehabilitation Plan, the Opt Out Trust is entitled to receive the Opt Out Percentage of any distributions from the ELIC Trust. The Opt Out Percentage is approximately 33.9%, which is the claim value of the former ELIC contracts held by Opt Out Contract Holders, as a percentage of the claim value of all of the former ELIC contracts held by Opt Out Contract Holders and Non-Opt Out Contract Holders. Roberson Decl. ¶3; Rehabilitation Agreement §7.7; ELIC Trust Agreement §§ 3.5, 4.1 and 5.3.2; Amended and Restated Opt Out Trust Agreement dated August 17, 1994 (the "Opt Out Trust Agreement"), Article Three & §6.5. Accordingly, under the Commissioner's proposed distribution of the $100 million of Altus Litigation Proceeds, approximately $33.9 million will be distributed by the Commissioner to the Opt Out Trust, to be distributed pro rata based on relative claim values to the approximately 27,000 Opt Out Contract Holders that are the beneficiaries of the Opt Out Trust, pursuant to the terms of the Opt Out Trust Agreement. Roberson Decl. ¶4.

Pursuant to the terms of the Rehabilitation Plan, the remaining approximately 66.1% of any distribution by the ELIC Trust is the Non-Opt Out Percentage, which is the claim value of the former ELIC contracts held by Non-Opt Out Contract Holders, as a percentage of the total claim value of all of the former ELIC contracts (including those held by Opt Out Contract Holders and those held by Non-Opt Out Contract Holders). Under the Rehabilitation Plan, such Non-Opt Out Percentage is paid to Aurora for distribution for the benefit of Non-Opt Out Contract Holders (and their subrogees, if applicable) pursuant to the terms of the Enhancement Agreement. Accordingly, approximately $66.1 million of the proposed $100 million distribution is distributable to Aurora, which in turn must distribute the $66.1 million for the benefit of Non-Opt Out Contract Holders (and their subrogees, if applicable) as provided in the Enhancement Agreement. Roberson Decl. ¶5; Rehabilitation Agreement §9.6; Enhancement Agreement, Articles 4, 10, 12 and 17; ELIC Trust Agreement §5.3.4. Such distribution by Aurora takes the form of cash distributions to some Non-Opt Out Contract Holders and credits to Restructured Account Values of other Non-Opt Out Contract Holders, depending on the type of policy. Roberson Decl. ¶5; Rehabilitation Agreement §9.1 (last sentence).

As a final step in the process with respect to the $66.1 million distributable to Aurora for the benefit of Non-Opt Out Contract Holders (and their subrogees, if applicable), it must be determined whether the $66.1 million is or is not a "Deemed Securities Distribution" within the meaning of Section 17.1.2.2.2 (i) of the Enhancement Agreement. In a nutshell, any distributable amounts that constitute "Excess Funds," "Michigan Excess" or "Securities Proceeds" (as defined, respectively, in Sections 2.35, 2.54 and 2.77A of the Rehabilitation Agreement) are a "Deemed Securities Distribution" that must be distributed by Aurora pursuant to the terms of Section 17.1.2.2.2 (i) of the Enhancement Agreement, without regard to the assignment by the Participating Guaranty Associations ("PGAs") of their subrogation rights pursuant to Article 10 of the Enhancement Agreement (an "Article 17 Distribution"). Conversely, any amounts distributable to Aurora for the benefit of Non-Opt Out Contract Holders (and their subrogees, if applicable) that are not a "Deemed Securities Distribution" must be distributed by Aurora pursuant to the terms of Article 10 and Article 17.1.2.2.2(iv) of the Enhancement Agreement, taking into account and giving effect to the PGAs' assignment of their subrogation rights pursuant to Article 10 of the Enhancement Agreement (an "Article 10 Distribution").

The Commissioner maintains that the $66.1 million in Altus Litigation Proceeds distributable to Aurora does not constitute Excess Funds, Michigan Excess or Securities Proceeds as defined in the Rehabilitation Agreement (and accordingly does not constitute a Deemed Securities Distribution) and therefore must be distributed by Aurora as an Article 10 Distribution rather than an Article 17 Distribution. Following the calculation applicable to an Article 10 Distribution, under the Commissioner's proposed distribution, of the total approximately $66.1 million distributable to Aurora, Aurora will be required to distribute (i) approximately $2 million to the PGAs pursuant to Section 17.1.2.2.2 (iv)(y) of the Enhancement Agreement, and (i) the remaining approximately $64.1 million (by a combination of cash distributions and credits to Restructured Account Values) for the direct benefit of Non-Opt Out Contract Holders (or their non-PGA, third-party subrogees, as applicable) pursuant to Article 10 and Section 17.1.2.2.2(iv) of the Enhancement Agreement. Roberson Decl. ¶12.9

Accordingly, pursuant to this Motion, the Commissioner seeks an Order approving the distribution of the subject $100 million in Altus Litigation Proceeds as follows (subject to the "de minimis exception" described in Part IV below):

1. approximately $33.9 million to the Opt Out Trust, for distribution to the Opt Out Contract Holders pursuant to the terms of the Opt Out Trust Agreement; and
2. approximately $66.1 million to Aurora, for distribution by Aurora as follows pursuant to the terms of the Enhancement Agreement:
   1. such amount as remains due to the PGAs pursuant to Section 17.1.2.2.2(iv) of the Enhancement Agreement, estimated to be approximately $2 million; and
   2. approximately $64.1 million (by a combination of cash distributions and credits to Restructured Account Values as provided in Section 9.1 of the Rehabilitation Agreement) for the direct benefit of Non-Opt Out Contract Holders (or their non-PGA, third-party subrogees, as applicable) pursuant to Article 10 and Section 17.1.2.2.2(iv) of the Enhancement Agreement.

The Commissioner would like to see the distribution of the subject $100 million in Altus Litigation Proceeds proceed at the earliest possible time, so that such funds redound to the benefit of those entitled to receive them pursuant to the Rehabilitation Plan.

Pursuant to this Motion, the Commissioner requests that the foregoing proposed distribution be subject to the exception described in this Part IV (the "de minimis exception") pertaining to any distribution check that is issuable by Aurora to any Non-Opt Out Contract Holder, or by the Opt Out Trust to any Opt Out Contract Holder, that would be less than the amount of $2.00.

All distributions by the Opt Out Trust to Opt Out Contract Holders are in cash (effected by the issuance of checks to the Opt Out Contract Holders). Roberson Decl. ¶6. And as noted above, when Aurora makes a distribution to Non-Opt Out Contract Holders, whether or not a Non-Opt Out Contract Holder receives cash for his or her allocation of the distribution (effected by the issuance of a check to such Non-Opt Out Contract Holder) or receives a credit to his or her Restructured Account Value depends upon the type of policy held by such Non-Opt Out Contract Holder. Id. For any cash distributions by either the Opt Out Trust (for the benefit of Opt Out Contract Holders) or Aurora (for the benefit of Non-Opt Out Contract Holders or their subrogrees, if applicable), there are significant costs associated with cash distributions effected by checks. Those costs include check-printing costs, mailing costs, costs associated with provision of annual tax forms (1099s) and escheatment costs. Id. Based on an analysis of costs incurred in making various prior distributions, these costs are estimated to be approximately $2.00 per check issued. Id.

Accordingly, in order to provide that the cost of a cash distribution to any Opt Out Contract Holder or Non-Opt Out Contract Holder does not exceed the cash amount distributable to such policyholder, this Motion proposes that no check shall be issued by the Opt Out Trust to any Opt Out Contract Holder, or by Aurora to any Non-Opt Out Contract Holder, where the cash amount distributable to such contract holder is less than $2.00. Further, because such amount is de minimis, and because the cost of carrying a future credit for the account of any affected Opt Out Contract Holder or Non-Opt Out Contract Holder would be disproportionate to the de minimis benefit, the Motion also proposes that no credit or future benefit with regard to any such undistributed amount of less than $2.00 shall be maintained or provided by either the Opt Out Trust or Aurora, and instead that any such undistributed amounts shall be distributed by the Opt Out Trust and Aurora back to the Commissioner/ELIC and maintained as part of the ELIC estate, and included in the next or final distribution by the Commissioner/ELIC to the Opt Out Trust (for the benefit of Opt Out Contract Holders) and to Aurora (for the benefit of Non-Opt Out Contract Holders or their subrogees, if applicable).

CONCLUSION

For all the reasons set forth above, the Commissioner respectfully requests that the Court grant this Motion and enter an Order approving the distribution of the subject $100 million of Altus Litigation Proceeds as requested above, in the form of the Proposed Order Approving Distribution Of $100 Million Of Altus Litigation Proceeds submitted herewith.