Royal Indemnity Seeks Bond Funds From Lender

Law360, New York (February 13, 2008, 12:00 AM EST) -- Royal Indemnity Co. has asked a federal court to lift an automatic stay involving bankrupt student-loan company Student Finance Corp. so that the insurer can collect a portion of a $10 million bond that covered employee fraud.

Royal filed the motion on Tuesday, asking the U.S. Bankruptcy Court for the District of Delaware for relief from the stay so the credit risk insurer could file a civil suit against Student Finance and Hartford Fire Insurance Co., which issued the bond.

A hearing on Royal's motion is...
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