Attorney Edward Stone and representatives of the Christensen & Jensen law firm, who are representing Executive Life of New York (ELNY) structured settlement shortfall payees in multiple legal actions, have responded to a contempt order issued January 25, 2013 by New York State Supreme Court Judge John M. Galasso with a press release announcing their plan to pursue an appeal with the Appellate Division of the Supreme Court of the State of New York.
Judge Galasso's contempt order against the ELNY shortfall payee attorneys followed their filing of an ELNY class action lawsuit in the United States District Court Southern District of New York (federal court) which Judge Galasso ruled was a violation of existing ELNY anti-lawsuit injunction orders.
Stone and Christensen & Jensen filed the ELNY class action November 8, 2012 against Benjamin M. Lawsky, Superintendent of the New York Department of Financial Services, (Superintendent) and his predecessors, in their “non-regulatory” capacities as ELNY receivers, claiming breach of fiduciary duty and fraudulent omission among other allegations. The class action complaint also named Metropolitan Life Insurance Company and Credit Suisse Group, AG as defendants.
Judge Galasso's contempt order also included a fine, payable by the ELNY shortfall payee attorneys to the Superintendent, for costs, disbursements and reasonable attorney’s fees the Superintendent has incurred defending the federal class action and for pursuing the contempt application plus potential additional legal expenses if the Superintendent achieves a favorable result in the ELNY appeal. For purposes of the fine, the Superintendent's attorney fees are capped at $5000.
Representing 18 ELNY shortfall payees, Stone and Christensen & Jensen have also appealed Judge Galasso's April 16, 2012 ELNY Liquidation Order. Oral arguments in the ELNY appeal have concluded and a decision is expected shortly.
Press Release - distributed by Stone and Christensen & Jensen on January 28, 2013:"GALASSO CONTEMPT DECISION - VIOLATES UNITED STATES CONSTITUTION; PUNISHES VICTIMS; WASTES ELNY ASSETS
New York State Supreme Court Judge John M. Galasso decided to hold attorneys for structured settlement victims in civil contempt for filing a class action lawsuit in the United States District Court for the Southern District of New York despite acknowledging that "This Court is not empowered to dismiss the federal complaint outright".
We are disappointed that Judge Galasso interprets the injunctions as broader in scope than the immunity provisions contained in the various orders issued in connection with the failed rehabilitation of The Executive Life Insurance Company of New York dating back to 1991. On the other hand, we agree that Galasso is not empowered to dismiss the federal complaint and we look forward to the day when the victims of this tragedy will have a chance to shed light on what actually transpired with ELNY over the past 21 years. We intend to do everything we can to shed light on what led to this insurance industry failure of epic proportions.
For more than 21 years, victims have been kept in the dark while assets set aside to provide for their long term needs were squandered on the Superintendent's watch. We asked the Superintendent to look into the single largest failed effort at "Rehabilitation" in the history of the State of New York and he refused. We regret Superintendent Lawsky's decision to pursue contempt sanctions and we obviously interpret the injunctions differently than Judge Galasso does. We plan on pursuing an appeal on substantive and constitutional grounds with the Appellate Division."
Additional Resources
For additional S2KM reporting about the ELNY contempt proceeding, see:
- Superintendent Seeks ELNY Contempt Order
- ELNY Payees' Attorneys Respond to Contempt Motion
- ELNY Contempt Order Issued
For S2KM's complete and continuing ELNY reporting, see the structured settlement wiki.
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