Phencorp is a reinsurance company organized under the laws of Barbados. Phencorp is a wholly owned subsidiary of Philip Services Corporation (“PSC”), a Delaware corporation. In 2004, Central States sued Phencorp to recover funds allegedly owed to it by PSC under ERISA. After improperly serving the complaint on one of Phencorp’s former employees, the court directed that Phencorp could be properly served through its attorneys. The parties were permitted to conduct discovery on the issue of jurisdiction. This matter came before the court on Phencorp’s motion to dismiss the Complaint for lack of personal jurisdiction.
The court denied Phencorp’s motion to dismiss, concluding that although Phencorp had no employees, physical place of business or real estate in the U.S., it had sufficient contacts to support personal jurisdiction. Specifically, the court found that Phencorp had entered into at least five reinsurance agreements with fronting companies that have operations in the U.S., and that Phencorp agreed to submit disputes arising under the reinsurance contracts to arbitration in New York. Additionally, Phencorp maintained a post office box in Florida through an agent. Lastly, the court noted that Phencorp maintained a bank account in the U.S. and requested to be treated as a domestic corporation for U.S. tax purposes. Central States v. Phencorp Reinsurance Company, Case No. 04 C 5655 (USDC N.D. Ill. Jan. 11, 2008).
This post written by Lynn Hawkins.