A surety insurer is suing a factoring company over who gets paid first from a New York contractor's receivables.
QBE Insurance Corporation filed a complaint on September 17 in the US District Court for the Southern District of New York against Newco Capital Group, which operates under the name Valinor Capital. The dispute is about construction contract receivables that QBE alleges were already pledged to it - years before Newco entered the picture.
The filing traces the relationship back to a General Agreement of Indemnity signed on or about February 25, 2016 - a standard surety backstop that was a condition of QBE writing performance and payment bonds for a New York-based contractor, UTB-United Technology, on construction projects across the state.
Among other things, the GAI gave QBE a security interest in UTB's contract receivables and required those funds to be held in trust for the benefit of subcontractors and suppliers. It also contained an assignment clause: if UTB defaulted on its obligations, its rights to contract balances on bonded projects would transfer to QBE. According to the complaint, multiple defaults have occurred. QBE filed a UCC-1 - a public notice that formally stakes a claim to those receivables - on March 28, 2024.
The complaint alleges that in July 2025 - more than a year after QBE's public filing - Newco entered a receivables-purchase agreement with UTB. Under that deal, the complaint says, Newco agreed to buy UTB's future receivables for $150,000, with UTB required to hand over 8% of incoming receivables until $207,000 was repaid. Newco filed its own UCC-1 on July 11, 2025.
On September 10, 2025, operating as Valinor Capital, Newco sued UTB and its principal in New York state court for breach of that factoring agreement, claiming UTB had stopped making payments and owed $246,925.28.
Here's where it gets pointed. QBE alleges the receivables Newco was chasing are the very same contract funds already assigned to QBE under the indemnity agreement. And it says Newco knew it.
The complaint sets out seven separate claims. The first four are priority disputes - QBE wants a court declaration that its security interest came first and overrides Newco's, that Newco has no rights to the disputed receivables, and that Newco's factoring agreement and UCC filing should be struck down entirely. QBE also raises a pointed argument on that last claim: it notes that "Valinor Capital" - the name under which the factoring agreement was executed and the UCC-1 filed - is not itself a legal entity. According to the complaint, Newco has admitted as much, and QBE argues the agreement is void on that basis alone.
The remaining three claims are where the complaint sharpens. QBE alleges Newco deliberately interfered with the indemnity agreement by knowingly entering a deal that diverted receivables already pledged to QBE. It alleges Newco interfered with QBE's economic interests by filing a competing lien despite knowing about QBE's prior claim. And it alleges Newco and its unnamed officers and members wrongfully diverted trust funds - money that, under both the indemnity agreement and New York's Lien Law, was supposed to flow to subcontractors and suppliers through QBE.
QBE says its losses on bond claims tied to UTB's projects already exceed $15,541,596.55, including legal costs. It is asking the court to lock in its claim at that amount - plus any additional losses during the litigation - and is seeking compensatory and punitive damages on the interference claims, and compensatory damages on the trust fund diversion claim.
The complaint lists eight separate lawsuits, filed between 2022 and 2024 in New York state and federal courts, in which bond obligees made claims against QBE over money allegedly owed by UTB. These range from subcontractor payment disputes to union benefit fund actions. QBE cites them to support its argument that multiple defaults under the indemnity agreement had already triggered the assignment of receivables well before Newco's factoring deal was signed.
For surety claims teams, the case is a clean illustration of why factoring agreements and competing lien filings on a bonded account are an immediate red flag - and why an indemnity agreement's assignment clause is only as strong as the surety's willingness to enforce it.
None of the allegations in the complaint have been tested, and no court has made any findings on the claims.
