Courthouse News Service, a nationwide news service for lawyers and the news media, has published a report about the ELNY Liquidation Hearing titled: "Insurance Beneficiaries Say NY is Cheating". Written by Julia Filip, the article features the following quotes from attorney Edward Stone excerpted from written objections he filed on behalf of his ELNY structured settlement shortfall clients plus additional allegations Stone makes in his interview with the Courthouse News Service Article:
- "For more than twenty years the NYLB [New York Liquidation Bureau] mismanaged ELNY and created a deficit of epic proportions never before seen in the context of a life insurance company insolvency .... And now this court is being asked to sweep all of this waste, mismanagement and neglect under the rug by taking away benefits from those most in need: the shortfall payees."
- Stone's clients, and other ELNY structured settlement shortfall victims,"were excluded from the process of designing the liquidation plan and denied the opportunity to confront the New York Liquidation Bureau."
- "To suggest that my clients should have divined that their payments were being reduced prior to the receipt of the notice letter in mid-December, which is the only time any shortfall information was given to them, and somehow fashioned an alternative plan for consideration by the court with no access to any source data or reference materials they could have independently assessed is simply absurd."
- "Nobody ever came to anyone whose benefits were being cut and said, 'Hey, do you want to come up with an alternative plan, with a better way to do this?'"
- "To make matters worse, the Superintendent continues to maintain supervision over the process at the expense of the shortfall payees. ..Isn't 21 years of supervised rehabilitation enough?"
- "The NYLB proposed plan favors [Guaranty Associations] over shortfall payees and the entire restructuring agreement is designed to favor NOLGHA members' interests at the expense of my clients."
- "They're doing it [ELNY proposed liquidation and Restructuring Agreement] in a way that is so unfair and insensitive and the only reason they do it is to cover up 21 years of mismanagement."
- "I wasn't able to get an audit; who knows if [the Receiver and MetLife as annuity administrator] were paying people who were already dead?"
- "NYLB admitted that their data is not accurate and is unreliable, and they based all the data on information from only one source, which, by [NYLB's witnesses] own admission, is not credible, and was never verified by any third party."
- "The data produced by the NYLB to date is inconsistent, inaccurate and completely and wholly lacking in transparency. To push through an inequitable plan of liquidation and approve the restructuring agreement before the court, without giving the shortfall payees a meaningful opportunity to be heard flies in the face of the most basic notions of fairness and due process."
- "Based on the way twenty years of 'rehabilitation' have unfolded, my clients have no way of knowing the true financial condition of ELNY and there has been no transparency, no credibility and no integrity in the financial reporting that took place in the past."
- Referring to an article about ELNY written by New York attorney Peter Bickford: "ELNY's cash flow went negative in 2002, ten years after the plan of rehabilitation and six years before the economic downturn of 2008."
- "Without requiring any additional contributions from the [Guaranty Associations], we could structure an alternative plan that would have an independent entity take over, let them pursue legal action on behalf of everyone, let them supervise, and take all the contributions from the [Guaranty Associations] and pay off those benefits, and offer people alternatives. If they want to convert annuities into a different product, as a choice, they could do it now, as opposed to just leave them on a hook forever."
- "But to really propose a new plan, I would have to understand what the liabilities are, to really figure out what we have to do, we need the same information the other side has had for 3 years. We never got it."
- "A fair and equitable plan of liquidation would base future payments on the percentage of the original settlement that has been received by all payees and apply the percentage that remains outstanding to ELNY's assets, such that all 9,600 remaining ELNY payees receive as close to the same percentage of promised benefits as is possible."
- "A fair and equitable plan would also consider the impact of payment reductions and consider rescheduling future payments to allow for an upfront benefit to ease the transition for those payees whose payments are ultimately reduced. The proposed liquidation plan does not address this."
- "The most vile part is asking the judge to grant them judicial immunity ... I suspect from the data we had that something is not right. They made a $1 billion dollar adjustment to their reserve in 2006, based on a change in assumptions that they could have made in 1992."
The ELNY Liquidation hearing continues for the sixth day today before Judge John M. Galasso in Room 35 of the Nassau County State Supreme Court Building in Mineola, New York. S2KM's complete ELNY reporting appears on the structured settlement wiki.