Following 11 days of hearings at the Nassau County New York Supreme Court, presiding Judge John M. Galasso is deciding whether to sign an Order of Liquidation and Approval of a Restructuring Agreement for Executive Life of New York (ELNY) as proposed by the Superintendent of the New York State Department of Financial Services (Superintendent), as ELNY's Receiver.
The ELNY hearings have raised a variety of issues not all of which Judge Galasso will be expected or required to address:
- Will Judge Galasso approve the ELNY Liquidation Order and Restructuring Agreement as proposed by the Superintendent?
- Does Judge Galasso have any other options?
- Why wouldn't Judge Galasso appoint a "Special Master" to consider objections and/or alternatives to the proposed ELNY Restructuring Agreement?
- Would his denial of the proposed Order necessarily result in a "statutory liquidation" under New York law?
- What would a statutory liquidation mean for: 1) ELNY annuity policyholders and payees; 2) NOLHGA and the participating Guaranty Associations (PGAs); 3) New York Governor Andrew Cuomo and Superintendent Benjamin Lawsky; 4) the structured settlement industry?
- Would any of the ELNY structured settlement shortfall payees be better off under a statutory liquidation?
Assuming Judge Galasso does approve the proposed Order:
- Will the Liquidation Order grant legal immunity to the Superintendent, as ELNY Receiver, and his agents, including the New York Liquidation Bureau (NYLB), for their acts and omissions in managing ELNY's Rehabilitation since 1991?
- What is the legal justification for any such grant of immunity?
- Did Judge Galasso commit reversible errors when he denied various motions by attorneys representing ELNY structured settlement payees who expect to experience shortfalls under the proposed Restructuring Agreement?
- Would attorneys for the ELNY shortfall payees appeal the result?
- What would be the basis for their appeal?
- Assuming an appeal bond is required, how much would it cost?
- Assuming the ELNY shortfall payees won an appeal, what would they hope/expect to accomplish with a new hearing?
- Besides an appeal, what other options, if any, exist for ELNY structured settlement shortfall payees?
Additional issues raised, but not definitively resolved, during the ELNY hearing:
- When did ELNY become insolvent?
- Who was responsible for ELNY's insolvency?
- How many of the ELNY structured settlement shortfall annuities are funded with Qualified Assignments as opposed to "Buy and Hold" funding?
- Who are the defendants, liability insurers and/or brokers who purchased or funded ELNY annuities with anticipated shortfalls?
- Which PGAs will contribute to specific ELNY contracts?
- Which life insurance companies have offered to make voluntary contributions and/or enhancements to Guaranty Association Benefits Company (GABC)?
- Why would they contribute anything? And, why won't they contribute more?
- How much additional money would be required to make all ELNY structured settlement payees whole?
- What impact, if any, will the ELNY Liquidation have upon:
- The structured settlement industry?
- The existing state insurance regulatory system?
- The insurance liquidation process in New York?
For additional S2KM reporting about the ELNY liquidation, see the structured settlement wiki.