Hartford, Capital Credit in $3M bankruptcy clash
Hartford Accident and Indemnity lost a bankruptcy court fight over frozen bank accounts but won on appeal. Pro-Mark Services filed for Chapter 7 protection in April 2024 after Capital Credit Union froze more than 3.3 million dollars in deposit accounts. The North Dakota credit union sought to seize the money, while Hartford claimed rights under surety bonds it had issued for federal construction projects.
An appeals panel reversed the lower court ruling on Oct. 20 and said judges must follow the intercreditor agreement that Hartford and the credit union signed in July 2022. That contract divided assets between bank collateral and surety collateral. The case returns to bankruptcy court, where a judge will apply the agreement terms to determine who controls the disputed funds.
