In re the Liquidation of National Mortgage Corp.

In the court’s opinion the provision of subdivision 5 of section 425 of the Insurance Law authorizing a secured creditor to surrender his security, in order to have his claim allowed without deduction of the value of the security, does not contemplate the surrender of the security after the expiration of the time to file claims. Otherwise, a claimant could speculate with the security, at the expense of the estate in liquidation, for an indefinite period of time after the final date fixed for the filing of claims and, if the results proved unsatisfactory, then surrender the security and have his claim allowed in full. The motion to authorize a surrender to the Superintendent of Insurance is accordingly denied.