Liquidator's Fourth Status Report

FILED: 3/18/2026 9:17 AM Vermont Superior Court Washington Unit 24-CV-00275

STATE OF VERMONT

SUPERIOR COURT WASHINGTON UNIT

COMMISSIONER OF THE ) DEPARTMENT OF FINANCIAL ) REGULATION ) PLAINTIFF, ) ) CIVIL DIVISION v. ) DOCKET NO. 24-CV-00275 ) NEELEY INCORPORATED CELL, ) RESPONDENT. )

LIQUIDATOR’S FOURTH STATUS REPORT

I, J. David Leslie, Special Deputy Liquidator, hereby submit this status report concerning the liquidation of the Neeley Incorporated Cell (“Neeley” or the “Company”).

1. On January 23, 2024, the Commissioner of the Department of Financial Regulation (“Commissioner”) filed an ex parte Petition for Seizure Order pursuant to 8 V.S.A. § 7042(b), seeking, among other things, authorization to take immediate possession and control of the property, books, documents and other records of the Neeley Incorporated Cell (“Neeley” or the “Company”). The Court granted the Commissioner’s petition by entering the requested order (“Seizure Order”) on January 27, 2024. Following entry of the Seizure Order, the Commissioner further investigated the Company’s condition, concluded rehabilitation would be futile, and filed a Petition for Order of Liquidation on February 15, 2024. On March 6, 2024, the Court entered its Order of Liquidation (“Liquidation Order”) that, among other things, appointed the Commissioner as Liquidator (“Liquidator”), authorized him to appoint a special deputy liquidator and approved the Plan of Liquidation that required the

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Liquidator to provide creditors and others with notice of the Liquidation Order and a claim filing deadline no less than six months from the date of the Liquidation Order. See Liquidation Order ¶¶ 1, 5, 6, and 7. The Liquidator appointed me to serve as Special Deputy Liquidator on March 7, 2024.

2. Petersen Health Care LLC’s Chapter 11 Bankruptcy Petition. Neeley was formed to provide general and professional liability insurance to Petersen Health Care LLC (“Petersen”) and its affiliates and subsidiaries, primarily assisted living facilities and nursing homes in Illinois. Such coverage was afforded by Neeley under claims made policies issued for the periods: February 5, 2021-December 31, 2021; January 1, 2022-December 31, 2022; and January 1, 2023-December 31, 2023 (collectively, “Policies”). Before the Liquidator could provide the notices required by the Liquidation Order, voluntary petitions for relief under chapter 11 of the Bankruptcy Code were filed by Petersen and certain of its affiliates and subsidiaries in the United States Bankruptcy Court for the District of Delaware (“Bankruptcy Court”) on March 20, 2024 (“Petersen Bankruptcy”). Upon the filing of those petitions, an automatic stay went into effect pursuant to 11 U.S.C. § 362.

3. Implications of Petersen’s Bankruptcy on Neeley’s Liquidation. The 22 pending claims under the Policies described in the Affidavit of Leslie Kaderavek submitted in support of the Commissioner’s Petition for Order of Liquidation, were necessarily claims against Petersen. Consequently, the automatic stay in bankruptcy impacted the ability of the Liquidator to resolve those claims and prevented him from giving the timely and clear directions to Neeley creditors contemplated by the Plan of Liquidation since timelines could not be set. In order to resolve Neeley’s obligations in liquidation, it was necessary for the Liquidator to consult with counsel

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for the debtors in the Petersen Bankruptcy (“Debtors’ Counsel”) about a coordinated claim determination process which occurred during September and October 2024.

4. Neeley’s Claim Against Petersen. Within the time period set forth in the order of the Bankruptcy Court, on July 15, 2024, the Liquidator filed a proof of claim in the Petersen bankruptcy proceeding for $1,401,947.60 of premium unpaid by Petersen regarding the Policies.

5. Other Steps to Implement the Plan of Liquidation. The Special Deputy Liquidator promptly provided copies of the Order of Liquidation to Neeley’s principal vendors, Marsh McLennan Agency, LLC (claim administration) and AIG Insurance Management Services, Inc. (captive management services) as well as Neeley’s banking institutions, M&T Bank (checking) and Wilmington Trust (invested assets). For the reasons described above, the Liquidator deferred setting a deadline for submitting claims or to resolve the now-pending claims. Doing so could have triggered expensive litigation to resolve the rights of the various stakeholders described above. Instead, the strategy was to give the Petersen Bankruptcy stakeholders an opportunity to achieve a consensus or otherwise resolve their respective interests as they relate to Neeley.

6. Confirmation of Chapter 11 Plan of Liquidation, Petersen Settlement Agreement, Lifting of Automatic Stay. On June 11, 2025, the Bankruptcy Court entered an order confirming a Chapter 11 plan of liquidation. The effectiveness of that plan was subject to the filing of executed Petersen Settlement Documentation. On August 7, 2025, the fully executed Petersen Settlement Documentation was filed, the Chapter 11 Plan of Liquidation became effective, and the automatic stay was lifted to allow claims under policies of insurance issued by Neeley to be resolved. The Petersen Settlement Documentation contains a provision entitled “Claims Under Policies Issued by Neeley” which reads in pertinent part as follows:

The automatic stay and confirmation injunction shall be lifted to allow claims under policies of insurance issued by Neeley to be resolved by the Commissioner of the

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Vermont Department of Financial Regulation, in his capacity as the court-appointed liquidator of Neeley (the “Neeley Liquidator”). Subject to the supervision of the Vermont court, the Neeley Liquidator shall have the authority and discretion to determine the coverage available and settle such claims and use Neeley’s assets to resolve claims, in accordance with law, without Mr. Petersen’s consent or approval.

SC Healthcare Holding, LLC et al., U.S. Bankruptcy Court (Delaware), Case No. 24-10443-TMH, Document 1756 (Filed 8/7/25), page 12 of 106. This provision was designed to facilitate implementation of the Claim Plan.

7. Amended Plan of Liquidation for Neeley. The Special Deputy Liquidator then consulted with counsel for the Unsecured Creditors’ Committee in the Petersen Bankruptcy (who also now represents the Liquidating Trustee appointed pursuant to the Chapter 11 Plan of Liquidation) concerning a process for resolution of claims under the Policies. On October 13, 2025, the Liquidator filed a Motion for Approval of Amended Plan of Liquidation which reflected the results of that consultation. The Court entered an Order Approving Amended Plan of Liquidation on October 14, 2025. The Liquidator thereafter gave notice of the Liquidation Order by both publication and mailing to known creditors. A copy of the Proof of Claim form approved by the Court, setting a December 31, 2025, deadline for filing claims, was included in those mailings. To date 17 proofs of claim have been filed and registered by the Liquidator.

8. Claim Determination Process. Using the services of Marsh McLennan Agency, LLC, which historically administered claims under the Policies, the Liquidator is now investigating and determining the 17 proofs of claim. In essence, claimants may either seek recovery from Neeley’s insureds, who were the debtors in the Petersen Bankruptcy (in which case their claims will be satisfied from the assets of the Liquidating Trust and not under the Policies) or they may pursue coverage available under the Policies and not against the Liquidating Trust. The time required to determine the claims submitted cannot be predicted at

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this point because it will be a function of the cooperation afforded by those claimants in the process. The Liquidator will seek to resolve all the claims submitted as soon as possible.

9. Neeley’s Financial Condition. During 2025, Neeley’s Shareholders’ Equity increased by 6%. Attached as Exhibit A is an unaudited Neeley Balance Sheet for the period ending December 31, 2025 and December 31, 2024. Attached as Exhibit B is a list of all disbursements during 2025. The value of invested assets reported on Exhibit A increased during 2025 by 4.9%, more than offsetting the expenses detailed on Exhibit B.

10. Next Steps. The Liquidator will continue to determine the claims submitted and will report further on that process no later than six months from the filing of this status report.

Dated this 16th day of March, 2026.

/s/ J. David Leslie J. David Leslie Special Deputy Liquidator

Subscribed and sworn before me this 16 day of March, 2026

/s/ [Signature] Notary Public KYLE BUOHL My commission expires: 7-10-31

[Seal: KYLE BUOHL, NOTARY PUBLIC, COMMONWEALTH OF MASSACHUSETTS, MY COMMISSION EXPIRES JULY 10, 2031]

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EXHIBIT A Neeley Incorporated Cell Balance Sheet December 31, 2025

	December 2025	December 2024
Assets
Operating Account	$ 17,413.24	$ 122,718.37
Investment - Money Market	43,402.97	449,329.42
Investments - Fixed Income, at Fair Value	3,253,388.40	-
Investments - Mutual Funds & ETFs, at Fair Value	-	2,694,918.38
Premium Receivable	1,401,947.60	1,401,947.60
Allowance for Doubtful Accounts	(1,401,947.60)	(1,401,947.60)
Accrued Interest on Investments	136.89	1,660.90
Deferred Tax Asset	33,950.56	33,950.56
Federal Income Tax Receivable	-	19,586.24
Total Assets	$ 3,348,292.06	$ 3,322,163.87
Liabilities and Shareholder Equity
Liabilities
Outstanding Loss Reserves	$ 893,771.88	$ 907,629.11
IBNR Loss Reserves	1,950,934.88	1,950,934.88
Premium Tax Payable	7,430.46	7,430.46
Accounts Payable and Other Liabilities	1,183.72	2,809.00
Federal Income Tax Payable	14,270.92	-
Total Liabilities	2,867,591.86	2,868,803.45
Shareholder’s Equity
Common Stock	275,000.00	275,000.00
Retained Earnings	178,360.42	64,960.45
Current Earnings (Deficit)	27,339.78	113,399.97
Total Shareholder Equity	480,700.20	453,360.42
Total Liabilities and Shareholder Equity	$ 3,348,292.06	$ 3,322,163.87

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EXHIBIT B Neeley Incorporated Cell Bank Register & Account Reconciliation 12/31/2025

M&T Bank Account Number 5960204034

Date	Check#/ Wire	Description	Running Balance #1010	Escrow Account #1110	Policy Acquisition Fees Payable #2320	Accrued Legal Fee Payable #2760	Captive Mgmt #2710	Federal Tax Payable #2800	Misc. Expense #7290	Bank Fees #7100
01/01/25		Beginning Balance	122,718.37
01/16/25	ACH	AIMS Q1 Mgmt Fee	(10,000.00)				10,000.00
01/09/25		Bank fees	(0.60)							0.60
01/16/25	ACH	Verrill	(906.00)			906.00
02/10/25		Bank fees	(0.67)							0.67
02/14/25		MMA TPA Escrow Funding	(3,796.23)	3,796.23
02/21/25	ACH	Davis Malm	(355.00)			355.00
03/10/25		Bank fees	(0.67)							0.67
04/03/25	ACH	JLCO tax invoice	(3,260.25)						3,260.25
04/03/25	ACH	MMA TPA Escrow Funding	(1,601.00)	1,601.00
04/11/25	ACH	Davis Malm	(2,865.50)			2,865.50
04/11/25	ACH	AIMS Q2 Mgmt Fee	(10,000.00)				10,000.00
04/24/25	ACH	Davis Malm	(2,924.50)			2,924.50
05/08/25		Bank fees	(1.67)							1.67
05/17/25	ACH	Davis Malm	(847.50)			847.50
05/23/25	ACH	MMA TPA Claim Renewal	(10,000.00)		10,000.00
06/09/25		Bank fees	(0.67)							0.67
06/27/25	ACH	Davis Malm	(1,415.50)			1,415.50
07/03/25	ACH	MMA TPA Escrow Funding	(5,551.50)	5,551.50
07/09/25	ACH	Davis Malm	(1,910.00)			1,910.00
07/09/25		Bank fees	(0.33)							0.33
08/08/25		Bank fees	(0.67)							0.67
08/15/25	ACH	Davis Malm	(284.00)			284.00
08/29/25	ACH	AIMS	(10,000.00)		10,000.00
09/09/25		Bank fees	(0.67)							0.67
09/18/25	ACH	Davis Malm	(4,517.50)			4,517.50
09/18/25	ACH	MMA TPA Escrow Funding	(2,908.50)	2,908.50
09/26/25	ACH	JLCO tax invoice	(4,968.00)						4,968.00
10/14/25	ACH	IRS payment with 2024 tax return filing	(8,261.00)					8,261.00
10/08/25		Bank fees	(1.00)							1.00
10/16/25	ACH	Davis Malm	(4,616.00)			4,616.00
11/10/25		Bank fees	(0.33)							0.33
11/21/25	ACH	AIMS Q4	(10,000.00)				10,000.00
11/21/25	ACH	Davis Malm	(1,225.00)			1,225.00
12/08/25		Bank fees	(0.67)							0.67
12/19/25	ACH	Davis Malm	(3,084.20)			3,084.20
		YTD Totals - 2025	17,413.24	13,857.23	20,000.00	24,950.70	30,000.00	8,261.00	8,228.25	7.95