A surety showdown is brewing in Manhattan federal court, where QBE is fighting a cash advance funder over who gets first crack at a defaulted contractor's money.
In a lawsuit filed on May 1, 2026, in the US District Court for the Southern District of New York, QBE Insurance Corporation says its rights to a New York contractor's construction receivables come ahead of a recent judgment won by EBF Holdings, LLC, which does business as Everest Business Funding.
The story, as QBE tells it in the filing, starts with bonds. QBE issued performance and payment bonds to UTB-United Technology, Inc., a contractor working jobs across New York. Before any of those bonds went out the door, UTB and Mohan Sharma signed a General Agreement of Indemnity, dated on or about February 25, 2016, that QBE relies on heavily here.
That agreement, according to QBE, gives the surety a security interest in "any Contract or contract rights or rights to the payment of money," and says that once the contractor defaults, the indemnitors "assign, transfer, and set over to the Surety all of their rights under a Contract," including "any and all sums due under the Contract." The same agreement labels contract payments as trust money, holding them "in trust as trust funds … for the benefit and payment of all obligations for which Surety may be liable under any Bond."
QBE says things have gone badly with UTB. The filing claims multiple events of default and alleged losses topping $16,614,860.41 in attorneys' fees and payouts to obligees on UTB-related projects, with at least eight related cases trailing in New York state and federal courts. To lock in its position, QBE says it filed a UCC-1 financing statement on or about March 28, 2024, attaching the indemnity agreement.
Everest Business Funding, for its part, came at the same contractor from a different direction. According to the filing, EBF sued UTB and Sharma in Nassau County state court in August 2025 over a Revenue Based Financing Agreement, under which it had bought $479,500 of UTB's "Future Receipts" for $350,000, with a 9% specified percentage of the contractor's future sales going back to EBF. EBF deemed UTB in default on August 14, 2025, and on April 1, 2026, walked away with a default judgment of $385,918.47.
Now QBE wants the federal court to say its claim to those receivables sits ahead of EBF's, fix its prior lien at $16,614,860.41 plus continuing losses, and put a permanent stop to enforcement of EBF's judgment under New York's CPLR sections 5239 and 5240, alongside an injunction.
For surety underwriters and claims teams, the case is the kind they have been bracing for, a head-on test of an indemnity agreement, a UCC-1, equitable subrogation and trust-fund language against a merchant cash advance funder chasing the same contractor's future receipts.
The allegations have not been tested in court. EBF Holdings has not yet filed a response, and no court has ruled on the merits of QBE's claims.
