Mealey's Insurance Insolvency : Mealey's : Legal News & Analysis

Mealey's Insurance Insolvency

September 24, 2024
Judge Grants DOJ’s $1.45M Forfeiture Bid In Bribery Case Against Insurance Magnate

STATESVILLE, N.C. — A North Carolina federal judge on Sept. 23 granted the Department of Justice’s (DOJ) motion for the preliminary forfeiture of two bank accounts totaling $1,454,758.45 seized by the Federal Bureau of Investigation while investigating a case resulting in a retrial at which the former owner of now-insolvent insurers was again convicted of bribery and conspiracy, finding that the government established the required nexus to show that the seized proceeds were related to the crimes.
September 24, 2024
Discovery Ruling Issued In Asbestos Coverage Row Involving Insolvent Insurer

OMAHA, Neb. — A Nebraska federal magistrate judge granted in part National Indemnity Co. (NICO)’s motion to compel discovery of an insurer in its suit seeking to enforce obligations by multiple insurers, one of whom is now insolvent, for the liability NICO incurred related to claims for asbestos exposure, finding that the attorneys’ eyes only designation (AEO) must be removed from discovery material due, in part, to the insurer’s failure to “articulate why an AEO designation is the right tool to prevent this harm.”
September 23, 2024
Confidentiality Stipulation Filed In $300M Ponzi Fraud Case Involving Insurers

MIAMI — Plaintiffs and defendant Wells Fargo filed a confidentiality stipulation in a Florida federal court in a putative class action suit alleging that Wells Fargo aided and abetted fraud in a “massive” Ponzi scheme purportedly orchestrated by owners of insurers, some of whom are now in receivership, resulting in elderly investor victims losing more than $300 million after scheme operators sold them promissory notes secured by collateral in stranger-oriented life insurance policies (STOLIs).
September 17, 2024
SEC Files Rule Compliance Notice In Fraud Suit Against Owner Of Defunct Insurers

WINSTON-SALEM, N.C. — The U.S. Securities and Exchange Commission on Sept. 16 filed a notice of compliance with local rules in a North Carolina federal court regarding its brief responding to a motion to compel discovery filed by insurance magnate Greg Lindberg, a former owner of insurers now in receivership, in a suit alleging that he, his advisory services company and its former executive defrauded clients of more than $75 million.
September 17, 2024
Florida Judge Denies Dismissal Bid In Investors’ Fraud Suit Over $65M Deal

ORLANDO, Fla. — Without explanation, a Florida judge denied dismissal of a complaint in which entities that purportedly invested about $65 million in a managing general agent just months before affiliated insurance companies were liquidated allege that they were defrauded.
September 16, 2024
Insurance Magnate Appeals $166.7M Dutch Arbitral Award To 4th Circuit

GREENSBORO, N.C. — Greg Lindberg, who in a separate proceeding moved for acquittal of his conviction on retrial for bribing the North Carolina insurance commissioner, filed a notice of appeal in a North Carolina federal court that he and his related companies are appealing to the Fourth Circuit U.S. Court of Appeals an Aug. 14 judgment of $166,797,838 granted in favor of insolvency practitioners for a Dutch insurer in liquidation to confirm a Dutch tribunal’s arbitral award and judgment.
September 13, 2024
Judge Dismisses Hurricane Coverage Row With Guaranty Association After Settlement

MIAMI — After being advised that the parties had reached a settlement, a Florida state court judge dismissed a breach of contract suit against the Florida Insurance Guaranty Association (FIGA), which had been substituted for a now-insolvent homeowners insurer sued by a homeowner over the insurer’s purported failure to cover damage from Hurricane Irma.
September 13, 2024
Judge Denies Motion To Reconsider Rehab Plan For Workers’ Comp Insurer

REDWOOD CITY, Calif. — Denying a motion that sought coverage of certain litigation costs for policyholders and a higher interest rate, a California state judge declined to reconsider her ruling approving a rehabilitation plan for California Insurance Co. (CIC), saying she “previously heard and considered these grounds.”
September 09, 2024
Louisiana Panel Reverses, Dismisses Hurricane Damage Row With Guaranty Association

GRETNA, La. — A Louisiana appellate court granted a writ of application and reversed a trial court decision denying an exception of prescription, an exception that can result in dismissal, in a hurricane coverage dispute between insureds and the Louisiana Insurance Guaranty Association (LIGA), finding that because LIGA was not an obligor with the now-insolvent insurer when the initial complaint was filed and the amended complaint adding LIGA was filed outside the two-year prescriptive period, the suit should be dismissed.
September 09, 2024
North Carolina High Court Allows Withdrawal Of Bid To Review Denial Of Continuance

RALEIGH, N.C. — The North Carolina Supreme Court “allowed” an intervenor holding company’s motion to withdraw its petition seeking review of an appellate court’s ruling affirming a lower court’s denial of a continuance in a liquidation proceeding involving insolvent insurers, asserting that withdrawal is appropriate in furtherance of the company’s settlement discussions with the North Carolina insurance commissioner.
September 03, 2024
Reinsurer’s Purchaser Wins Preliminary Injunction In Suit Over Forced Deal

NEW YORK — A New York federal judge on Aug. 30 granted a motion for preliminary injunction in an insurer’s suit over its April 14 purchase of Bermuda-based reinsurer JRG Reinsurance Company Ltd.
August 29, 2024
N.C. High Court Tosses Insurance Magnate’s Bid For Stay In Receivership Action

RALEIGH, N.C. — Without explanation, the North Carolina Supreme Court on Aug. 28 dismissed a motion for a temporary stay and writ of supersedeas in a judgment creditor’s suit seeking the appointment of a general receiver over the assets of judgment debtor Greg E. Lindberg, a former owner of insurers now in rehabilitation who was convicted of bribing the North Carolina insurance commissioner.
August 29, 2024
Production Of Full Funding Agreement Ordered In DUFTA Case Involving Insurer

WILMINGTON, Del. — Saying his relevance conclusion sprang from “the class action context . . . and the express terms of the Funding Agreement itself,” a Delaware Chancery Court vice chancellor ordered the plaintiffs in a suit over an alleged scheme to strip capital from an insurance subsidiary on which many policyholders depend for long-term care (LTC) disability benefits to produce the funding and contingent fee agreements in their entirety.
August 27, 2024
4th Circuit Upholds Judgment Against Insurance Mogul In $524M Guaranty Case

RICHMOND, Va. — In a brief Aug. 26 unpublished per curiam opinion, a Fourth Circuit U.S. Court of Appeals panel affirmed judgment that enforces an arbitration award for $524 million plus interest against an insurance mogul who issued a guaranty.
August 22, 2024
Judge Grants Dismissal Motions In Asbestos Suit Involving Guaranty Association

NEW ORLEANS — Having been advised that the parties engaged in settlement, a Louisiana federal judge granted six dismissal motions filed by the plaintiff jointly with separate defendants in an asbestos liability suit against a shipyard, related defendants, insurers and the Louisiana Insurance Guaranty Association (LIGA) over a man’s exposure to asbestos resulting from his work at a shipyard.
August 22, 2024
Agent In Workers’ Comp Insurer Chapter 11 Case Files Affidavit Regarding Objection

WILMINGTON, Del. — A claims and noticing agent in the Chapter 11 bankruptcy proceeding of Patriot National Inc., a workers’ compensation insurance firm for which a litigation trust is now acting as successor-in-interest, filed an affidavit in a Delaware bankruptcy court attesting that documents regarding the liquidating trustee’s fifth omnibus objection to certain claims have been served on the appropriate parties.
August 21, 2024
Judgment Issued For Insurance Magnate’s Former Companies In Breach Of Contract Row

RALEIGH, N.C. — A North Carolina federal judge granted a motion filed by now-insolvent insurance companies once owned by Greg E. Lindberg, an insurance magnate convicted of bribing the North Carolina insurance commissioner, seeking summary judgment for their breach of contract claim and the defendants’ counterclaims in consolidated cases regarding alleged defaults on loan agreements, finding no remaining issues of material fact regarding the borrower defendants’ liability for breach of contract and for the borrower defendants’ counterclaims.
August 20, 2024
Receiver Tackles Proposal Objections In Reinsurer’s Liquidation Proceeding

WILMINGTON, Del. — In a consolidated reply filed Aug. 19 in the Delaware Chancery Court, the receiver for life and health reinsurer Scottish Re (U.S.) Inc. (SRUS) argues for dismissal of the objections to four proof of claim (POC) procedures he proposed in the liquidation.
August 20, 2024
Hurricane Coverage Row With Guaranty Association Dismissed With Reopening Provision

NEW ORLEANS — After being advised that the parties reached a compromise agreement, a Louisiana federal judge dismissed a breach of contract suit over damages from Hurricane Ida filed against the Louisiana Insurance Guaranty Association (LIGA), which was substituted for an insolvent homeowners insurer, finding that the claims must be dismissed without prejudice only as to the right to reopen the case if the settlement is not completed within 60 days.
August 20, 2024
Judge Closes Case Seeking To Stay Arbitration On Report Of Settlement In Principle

NEW YORK — Citing a notice “that all claims asserted herein have been settled in principle,” a New York federal judge closed a case in which the successor of an assuming reinsurer sought to stay an arbitration demand.
August 15, 2024
Health Insurers, U.S. Government File Status Report In Dispute Over ACA Payments

WASHINGTON, D.C. — Health insurers and the U.S. government filed a joint status report in the U.S. Court of Federal Claims in a risk-corridor payment dispute under the Patient Protection and Affordable Care Act (ACA) that is related to a similar suit involving insurers in liquidation also seeking compensation under the ACA.
August 14, 2024
Partial Dismissal Granted In $1B RICO Insurance Fraud Scheme Involving Magnate

RALEIGH, N.C. — A North Carolina federal judge on Aug. 13 partially dismissed a Racketeer Influenced and Corrupt Organizations Act (RICO) case against defendants accused of participating in a $1 billion scheme to defraud now-insolvent insurers once owned by former insurance magnate Greg Lindberg, finding that the pleadings lack specificity as to those entities indirectly owned by Lindberg.
August 14, 2024
Chancellor Notified As To Service Of Process In Health Plan Liquidation Proceeding

WILMINGTON, Del. — The assignee for the benefits of creditors of Friday Health Plans Inc. (FHP) and Friday Health Plans Management Services Co. Inc. (FHP MSC) filed a letter in the Delaware Chancery Court notifying a vice chancellor that the assignee filed copies of an affidavit of service establishing service of process in the court’s assignment for the benefit of creditors (ABC) proceeding to liquidate the assets of FHP and FHP MSC.
August 13, 2024
Panel Tosses Bid For Stay In Receivership Action Against Owner Of Defunct Insurers

RALEIGH, N.C. — Without providing an explanation, the North Carolina Court of Appeals on Aug. 12 dismissed a motion for a temporary stay in a judgment creditor’s suit seeking the appointment of a general receiver over the assets of judgment debtor Greg E. Lindberg, a former owner of insurers now in rehabilitation who was convicted of bribing the North Carolina insurance commissioner.
August 12, 2024
After Reassignment, Judge Considers Vacating Ruling In Hurricane Coverage Dispute

LAFAYETTE, La. — After a hurricane coverage dispute was reassigned to a different Louisiana federal judge, the new judge opined about considering vacating the previous judge’s order denying a homeowner’s motions to amend and file a supplemental complaint to add the Louisiana Insurance Guaranty Association (LIGA) as a defendant as the purported statutory obligor for a now-insolvent homeowners insurer.