Beyond Structured Settlements

ELNY Hardship Fund - 2

Anticipated appeals of the Order of Liquidation and Approval of the Executive Life of New York (ELNY) Restructuring Agreement by shortfall victims will neither delay the administration of Hardship Fund applications nor cause the Hardship Fund to discriminate against ELNY shortfall victims who participate in such appeals according to recent changes made to the ELNY Hardship Fund website.

Responding to concerns of ELNY shortfall victims, as reported in this prior S2KM blog post, JAMS, as Manager of the ELNY Hardship Fund, has added the following statements to the ELNY Hardship Fund website:

• "Some payees may decide to appeal Judge Galasso’s April 16 decision to approve the ELNY liquidation plan. Participation in the appeals process will not be a factor in decisions JAMS makes about the distribution of money from the fund to eligible payees."
• "Because JAMS is not a party to the court proceedings or any appeal of the court’s order and because JAMS intends to administer the Hardship Fund in an expeditious manner, the preparation, mailing and review of the applications will not be delayed by those court proceedings."

The revised ELNY Hardship Fund website, however, still includes this important proviso: "The Hardship Fund, while not part of the restructuring plan approved by the court, is contingent upon its final approval. In the event Judge Galasso’s decision is appealed and the liquidation order is rejected, the conditions for establishing the Hardship Fund will not be met and no payments from it will be available."

A representative of JAMS has informed S2KM that JAMS' ELNY Mission is "to develop and execute a Hardship Fund process based upon the following values: transparency, fairness, respect, ethics, and excellence." JAMS' current ELNY priority, according to this representative, is to develop the guidelines and application process for the Hardship Fund.

For complete and continuing S2KM reporting about the ELNY liquidation, see the structured settlement wiki.

ELNY Hardship Fund

Will the Executive Life of New York (ELNY) Hardship Fund discriminate against individual ELNY shortfall victims if they attempt to appeal the Order of Liquidation and Approval of the ELNY Restructuring Agreement signed by Judge John Galasso on April 16, 2012?

Some ELNY shortfall victims and their attorneys think so. They interpret statements on the ELNY Hardship Fund website as a threat, intentional or unintentional, to prevent them from exercising their constitutional right to appeal. As background for their concerns, see:

• The ELNY Due Process Issue
• The ELNY Immunity Issue
• Mixed ELNY Reactions

The ELNY Hardship Fund statements in question:

"The life insurance industry has voluntarily committed to establishing a $100 million 'Hardship Fund' to assist those people most affected by ELNY’s liquidation. While the Hardship Fund will not fully address the problems arising from ELNY’s liquidation, it aims to mitigate the financial impact on those payees with the greatest need. The Hardship Fund, while not part of the restructuring plan approved by the court, is contingent upon its final approval. In the event Judge Galasso’s decision is appealed and the liquidation order is rejected, the conditions for establishing the Hardship Fund will not be met and no payments from it will be available." (emphasis added).

AND

"Payees who are expected to have their benefit payments reduced will receive an application packet from JAMS. It will include a questionnaire and request for certain documentation such as medical records and information about sources of income. Additional information and conditions may be required to complete the application. With the information you provide, JAMS will determine how to distribute the Hardship Fund’s resources, based on eligibility guidelines as developed by JAMS." (emphasis added).

These statements are repeated in an "Informal Notice" from JAMS, the ELNY Hardship Fund Administrator, mailed to ELNY shortfall victims on April 27, 2012.

The question now being asked by some ELNY victims and their attorneys: "Will the 'eligibility guidelines', developed by JAMS with input from contributing life insurance companies, discriminate against (blackball) ELNY shortfall victims who attempt to appeal Judge Galasso's Order."

Speaking for the ELNY structured settlement shortfall victims he represents, attorney Edward Stone states: "These statements represent another strong arm tactic to try to prevent ELNY shortfall victims from pursuing their constitutional rights."

To protect against Hardship Fund recriminations, the following quotes from ELNY structured settlement shortfall victims are printed anonymously:

• "The 'hardship fund' is a joke intended to save face for the annuity industry which has completely failed to stand behind the annuitants, each of whom was promised 'guaranteed lifetime benefits.' Only 1500 out of the 10,000 ELNY annuitants are suffering losses under this absurd plan. They should be spreading the losses equally among all 10,000 persons who bought these annuities. No hardship fund will correct that injustice. Rather than have JAMS churning fees deciding winners and losers, where absolutely every shortfall payee is suffering a severe hardship, better to save the JAMS overhead and simply give each of the 1500 annuitants $66,600, and close down the fund."
• "The message in the Hardship Fund letter is loud and clear: if we appeal and win, funds allotted to the Hardship Fund will no longer be available. We are unequivocally being asked to accept our losses on their terms. Big brother in this context is a big bully stripping 1,500 of us of our constitutional rights and denying us the ability to defend the financial security we were once promised."
• "I am one of the ELNY shortfall victims. My settlement resulted from medical malpractice when I was a baby.  I was born prematurely, and suffered severe visual impairments due to negligence.  I also have hearing impairments.  I am going to lose 53% of what was promised to me all those years ago.  I am terrified to figure out how in the world I am going to take care of myself and 3 minor children when the check drop hits.  I will need to get public assistance in order for us to survive. If they want to be really fair, divide the Hardship Fund equally among us 1500 shortfall victims and call it good.  That would be the right thing to do."

If you are an ELNY shortfall victim and wish to add your thoughts about the ELNY Hardship Fund anonymously to this blog post, add a comment using the link below or send an email with your comments to [email protected]. 

For S2KM's complete reporting about the ELNY liquidation, see the structured settlement wiki.