Mixed ELNY Reactions

In an article titled "Loss for Policyholders", written by James Campbell and published April 17, 2012 in the Wall Street Journal (WSJ), Executive Life of New York (ELNY) stakeholders expressed contrasting reactions to Judge John M. Galasso's decisions to:

• Approve the ELNY Restructuring Agreement proposed by the Superintendent of the New York State Department of Financial Services (Superintendent); and
• Grant judicial immunity to the Superintendent, as ELNY's Receiver, and the New York Liquidation Bureau (NYLB) "for any action or omission by any one or more of them when acting in good faith, in accordance with this Order, or in the performance of their duties pursuant to Insurance Law Article 74 ..."

Shortfall Payee

Eric Rabinowitz, a 43-year-old Manhattan man, who received an ELNY-funded structured settlement in 1983 after being blinded in his right eye during a cataract operation, told the WSJ: "They hung us out to dry and they knew for years that this thing didn't get properly protected and yet they gave us a few weeks to lawyer-up in holiday season."

Shortfall Payee Attorney

Connecticut attorney Edward Stone represents 12 payees whose combined ELNY benefits, according to the WSJ article, will be cut by $20 million under the approved plan. The article quotes Stone as saying: "Their benefits are being cut by more than 50%. One of my clients is being cut by 58%. This will mean major changes, and it may impact their ability to get medical care. One of my clients will have to file bankruptcy because the guarantees they were promised are not really guarantees at all."

According to Schedule 1.15 of the ELNY Restructuring Agreement, 1459 structured settlement payees will experience shortfalls ("uncovered amounts") as a result of ELNY's liquidation and restructuring even after state guaranty association contributions and voluntary enhancements by life insurance companies.

Stone also informed the WSJ: "the judge rejected his bid to call a number of witnesses to probe the [NYLB's] management of the company, including a former ELNY president, an actuary, a forensic accountant and a fraud expert."

Spokesman for Superintendent

David Neustadt, a spokesman for the Superintendent, disagreed with Stone's suggestion that the Superintendent and the NYLB might be guilty of mismanaging ELNY during the 20 plus years they supervised ELNY's Rehabilitation. "This is an absurd and baseless suggestion from a small-group of self-interested plaintiff's lawyers seeking to enrich themselves," Neustadt said.

Structured Settlement Industry Spokesman

Eric Vaughn, Executive Director of the National Structured Settlement Trade Association (NSSTA) "defended the structured-settlement industry, amid the failure of the ELNY rehabilitation" according to the WSJ article. Vaughn stated: "The Executive Life insolvency remains the only instance where any insurer of structured-settlement annuity has not made all payments in full and on time." In addition, according to Vaughn, "several hundred of the structured-settlement recipients might be able 'to recover shortfalls from the original insurers and other parties that have continuing responsibility under settlement agreements.'"

For S2KM's complete and continuing reporting about the ELNY liquidation, see the structured settlement wiki - and more specifically related to this blog post:

• The ELNY Due Process Issue - have anticipated shortfall victims received due process?
• The ELNY Immunity Issue - including and featuring Peter Bickford's analysis.
• ELNY Objections and Replies - summarizing arguments in the Superintendent's Reply Memorandum.

Comments

[Terri (Shortfall Victim)]

Are you kidding me? Enrich themselves? ELNY is the one that has enriched themselves with OUR money. These attorneys are standing up for us and being paid next to nothing! WE CAN'T AFFORD to pay them because ELNY Excecutives are the ones living high on the hog with OUR MONEY!
This being the only instance in which a company is not able to make payments on time and in full is only the beginning. They will all be doing this soon and AMERICANS that have worked their butts into the ground for retirements that disappear, disability settlements needed for medical issues, widows and widowers left without spouses due to negligence, children born with major medical issues because of malpractice; the list goes on and on, IT WILL HAPPEN TO YOU! Don't put your faith in the INSURANCE INDUSTRY it's NOT GUARANTEED!!!!!
The most sickening aspect is ELNY's superintendant and staff make it sound like it's only 15% they should be happy. Well that is discrimination at its best! Why not 100%? Because that would make the insurance industry would look back! No we will not let them sweep this under the rug. We will stand and fight together. It will not go unnoticed. We are a small group but we are mighty!

[Jennifer]

Certainly no suicide attempts here because I have four beautifully lovely children (1 adault, 3 minors) that I love with every part of my being.

But...regarding depression and counseling.....oh I forgot....I have to PAY for that. I guess I deal with it and muddle on through for free.

I can't even fathom how much money the lawyers have already lost. That is going to be a huge factor in their decision to push for an appeal on constitutional grounds. It's going to be all about the money. So we more than likely would not be able to defend our rights as American citizens because we won't have the money to pay for the lawyers to defend us. Irony!

[Elny Victim]

Dear Spokesperson for the Superintendent's Office,

I have estimated the number of hours my attorney has put into defending the definition of the word "guarantee". I personally have paid him less than minimum wage to defend my rights as an American citizen as defined in our Constitution. We still have one of those, right? Perhaps you should get your facts straight before you refer to Edward Stone as a "self interested plaintiff lawyer seeking to enrich himself" Oh that's right, your office has a problem with getting the facts straight.

Signed,
A shortfall payee who is insulted that you find it absurd to defend myself in this proceeding.

[[email protected]]

Does the Superintendent have any options for counseling that anyone is aware of? In my role of administrating [email protected] I am hearing comments that lead me to believe depression has set in and perhaps threats of suicide are real. I am no expert in this area. I am just a "human on earth" unlike Jonathan Bing of the Superintendent's office. Can the "Man" please man up and at least provide both mental and financial counseling to any shortfall payee who may need it? Or maybe you can continue to publish a 1800 number with a minimum wage worker on the other end who is reading from from your website? Talk about literally adding insult to injury.

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