A Pennsylvania judge is to rule next week on whether Legion Insurance is to be put into liquidation - and could mean that shareholders and policyholders of beleaguered Mutual Risk Management could see a payout sooner rather than later.

Legion Insurance Co., which is owned by MRM, has spent the last year in financial limbo under the charge of the Pennsylvania Insurance Department.

On May 18 Pennsylvania Commonwealth Court Judge Mary Hannah Leavitt will hear no more submissions about the liquidation petition - and is expected to make a ruling shortly after.

"The court is due to make a ruling on the liquidation," said David Ezekiel, head of IAS Park, the company that took over from MRM. "It certainly will have an impact on MRM in that shareholders will be able to see any value in their shares. The company has frozen any payouts so policyholders will get paid in certain lines of coverage."

It is understood that the Pennsylvania Insurance Department has wanted to liquidate the money-losing Philadelphia company, while its Bermuda-based owners, MRM, fought to keep it in business.

Now Legion's policyholders, which include the Denver Broncos and the Church of Scientology, railroads and hospitals, trucking lines and rent-a-cop services could see payouts from guarantee funds if liquidation is approved.

And recent press reports on cases of desperate calls from injured workers and accident victims who could not get Legion to pay their claims are likely to get things moving more quickly.

The callers were especially persistent in California, where Legion specialised in insuring high-risk drivers. In a state where many workers spend hours commuting, "15,000 Legion claims were not being paid," California insurance commissioner John Garamendi said last week.

"It was an astounding and intolerable situation," said Mr. Garamendi, who last year started his third term in the job, chosen by California's voters. Frustrated by Pennsylvania's inability to solve the problem, Mr. Garamendi did an end run: He asked a California court to do what the Pennsylvania court would not.

On April 25, he received permission to seize the company's California assets and pay claims. Insurance departments in Texas and North Carolina had already received similar permission.

"No consumer should have to wait this long for claims payment," Mr. Garamendi said. "The Pennsylvania judge's repeated delays in issuing a liquidation order have caused financial and emotional problems for thousands of California consumers who faithfully paid their premiums."

The Pennsylvania Judge in question, Judge Leavitt, recommended by the state bar association and elected in 2001 - in a campaign partly financed, like many Pennsylvania judicial campaigns, by law firms and insurance company PACs - to a 10-year term.

Judge Leavitt could be expected to appreciate the urgency of the situation. She had been the Insurance Department's general counsel in the mid-1980s. But Leavitt also appreciated the case's complexity, according to her deputy, Kathleen Cramer.

MRM insisted Legion's problems were temporary, depending on complex reinsurance payments it was having a tough time collecting. Three times Judge Leavitt put off Pennsylvania insurance commissioner M. Diane Koken's request to liquidate Legion.

Given the case's complexity, "the judge has been moving on this with great haste," Mrs. Cramer insisted on Friday. "It's not that this court is not sympathetic or not aware of how difficult this is for individual policyholders."

But Judge Leavitt had to balance Ms Koken's claims against Mutual Risk's "very serious opposition," Mrs. Cramer said. The case has moved more rapidly since Mr. Garamendi got his court order. Last week, Judge Leavitt approved a plan to move nearly $100 million in Mutual Risk cash to Legion, while giving the company access to an additional $200 million in claims reimbursements.

Even with those payments, Legion still faces a $300 million deficit, according to Pennsylvania Insurance Department spokeswoman Roseanne Placey. And the state is still seeking a liquidation order.