Attorney Edward Stone and representatives of the Christensen & Jensen law firm have filed a class action lawsuit on behalf of Executive Life of New York (ELNY) shortfall victims in the United States District Court Southern District of New York.
The Complaint names Jeanice Dolan, Daniel A. Malin, Keith Vincent, and other similarly situated ELNY shortfall victims, as plaintiffs, and Benjamin M. Lawsky, Superintendent of Financial Services of the State of New York, in his non-regulatory capacity as ELNY's Receiver, including predecessor ELNY Receivers (Rehabilitator), Metropolitan Life Insurance Company (MetLife) and Credit Suisse Group, AG (Credit Suisse) as defendants.
Causes of Action vs. Rehabilitator
- Breach of Fiduciary Duties - by:
- "violating a court order with respect to asset allocation,
- "employing a high risk tax inefficient investment strategy that created impermissible preferences,
- "wasting precious assets by paying [New York Liquidation Bureau] expenses that were excessive and not related to the management of the ELNY estate - much of which was outsourced,
- "failing to audit MetLife records and reconcile data with the social security death master file and
- "not seeking a purchaser who could and would honor ELNY's policy obligations."
- Fraudulent Omission - by "fraudulently concealing and failing to disclose material information to plaintiffs."
Causes of Action vs. MetLife
- Aiding and Abetting Breach of Fiduciary Duties - by:
- "engaging in 'bid rigging' with the Rehabilitator in order to strip ELNY's highest-quality assets and committing related misconduct,
- "benefiting from the deal,
- "apparently providing inducements for the deal (e.g. a lucrative future employment opportunity for the Rehabilitator's [r]epresentative),
- "aiding in the concealment of the misrepresentations made to obtain approval of the deal,
- "receiving "ill-gotten gains ... equaling hundreds of millions of dollars, including profits made from the receipt of ELNY's Single Premium Deferred Annuity and traditional life insurance books of business and renewals,"
- receiving "profits made on surrender charges to former ELNY policyholders", and
- receiving "profits made on the investment of high-quality assets received under the deal."
- Breach of Contract / Unjust Enrichment - by:
- receiving "unearned compensation from ELNY, at the expense of ELNY’s annuitants" and
- failing to fulfill contractual services resulting "in the inappropriate expenditure of funds, such as the payments made on behalf of deceased individuals whose benefits terminated at death."
Causes of Action vs. Credit Suisse
- Aiding and Abetting Breach of Fiduciary Duty - by:
- "affirmatively implementing an imprudent and unsuitable investment strategy that was incompatible with the nature of the liabilities dependent upon ELNY's assets," and
- "actively participating in the violation of court-ordered limitations on investment activities."
- Breach of Fiduciary Duty - by failing to:
- "consider the long-term investment needs of ELNY and the Plaintiffs;
- "select investments suitable with such needs and to maintain an asset allocation that was consistent with that strategy;
- "comply with court-ordered limitations or parameters regarding the investment of ELNY's assets; and
- "act with utmost loyalty to the Plaintiffs and ELNY, and not to act in their own self-interest adversely to the Plaintiffs and ELNY."
Requested Damages and Relief
- "Damages equaling the full present value of each Class Member's annuity issued by ELNY, less any amount determined to be owing to Plaintiff under the terms of ELNY's liquidation;
- "Damages equaling the amount of each defendant's unjust enrichment and ill-gotten gains;
- "Attorney fees and litigation expenses, to the extent permitted by contract or law;
- "Pre- and post-judgment interest, to the extent provided by contract or law; and
- "Such other equitable relief as the Court deems appropriate."
In addition, the Complaint demands a jury trial and seeks:
- The action to be certified as a class action;
- Plaintiffs to be appointed as representatives of the class;
- Counsel to be appointed counsel for the class; and
- An order to be issued providing for reasonable notice to be given members of the class.
Note: although filed by the same attorneys, this ELNY class action lawsuit is a separate cause of action from the ELNY appeal challenging the Executive Life of New York (ELNY) Order of Liquidation and Approval of the ELNY Restructuring Agreement signed by New York State Supreme Court Judge John M. Galasso on April 16, 2012. Oral arguments for the ELNY appeal were heard today by the Appellate Division of the Supreme Court of the State of New York, Second Department.
For S2KM's complete and continuing coverage of the ELNY liquidation, see the structured settlement wiki.