Two carriers just asked a federal court to void coverage for a bankrupt property manager — because nobody’s left to cooperate. If you take work orders from managers instead of owners, read this twice.
On September 11, 2026, Argonaut and AXIS filed in the Southern District of New York asking a judge to declare their coverage obligations to bankrupt property manager Common Living extinguished. Their argument, in plain English: the policy’s cooperation clause requires the insured to help defend the claim, and there is nobody left at Common Living to cooperate with.
The backstory matters. Property-owning LLCs demanded arbitration in January 2023 — breach of contract plus what the complaint calls “fraudulent concealment” and “constructive fraud” — seeking $9,355,935.15 over five workforce-housing properties (Common’s Noah brand, reported in the Hampton Roads and Winchester, Virginia area). A notice at one point floated an $8 million settlement figure.
Then the manager collapsed. Common Living filed Chapter 7 on May 31, 2024, in Delaware, listing up to $10 million in assets against $10–50 million in liabilities. In August 2025 the bankruptcy court lifted the automatic stay so the owners could press the arbitration — enforceable solely against the insurance policies. Then, in November 2025, defense counsel moved to withdraw, telling the arbitrator no employees or personnel remained and counsel couldn’t reach anyone. The withdrawal was granted in March 2026.
What followed reads like a ghost story. Between January and March 2026, the carriers wrote to the company’s former in-house counsel, its founder, the general counsel of its European parent, and the bankruptcy trustees. One former contact asked to be taken off the mailing list — it had been almost two years since they’d worked there. Another pointed to a colleague who never answered. A third bounced back an auto-reply: left the company.
Nobody has ruled on the merits. The fraud allegations are untested. But the carriers’ position is straightforward: a policy is a two-way bargain, and when one side stops existing, the bargain breaks.
Here’s why a restoration contractor should care. You routinely take direction — and purchase orders — from property managers who are not the named insured and not the policyholder. If the manager goes dark mid-claim:
- The cooperation duty belongs to the insured, not to you. You cannot cooperate on their behalf.
- If coverage is voided for non-cooperation, there is no policy to collect against. Your receivable dies with the coverage.
- Bankruptcy courts can let claims proceed “solely against the insurance policies,” as happened here in August 2025. That’s cold comfort if the policies get voided next.
The operator checklist:
- Know who the named insured is before you mobilize. Manager ≠ owner ≠ insured. Get it in writing.
- Get loss-payee or additional-insured status on the job’s policy where you can. It’s the closest thing to a seat at the table.
- Bill progress, not completion. Deposits and progress draws are your real insurance.
- Watch for distress signals: unanswered emails from the manager, counsel changes, ownership shuffles, “we’re restructuring.”
- Put stop-work triggers in your contract tied to payment dates, not to promises.
That’s operator practice, not legal advice — your attorney owns the contract language.
None of this would have saved a contractor already mid-job when Common filed. But it decides whether you’re an unsecured creditor hoping for scraps or a vendor who got paid along the way.
Sources: Insurance Business (Sept. 11 SDNY filing report); Commercial Observer and Bloomberg Law (June 2024 Chapter 7 filing); company background via public reporting on Common/Noah. Allegations described are the carriers’ and owners’ claims as reported — no court has ruled on the merits.