PINAULT, ARTEMIS NOW SOLE DEFENDANTS IN EXEC. LIFE TRIAL:

French billionaire financier François Pinault and his holding company, Artemis S.A., are the sole remaining defendants in the civil lawsuit seeking to recover some $4 billion on behalf of policyholders of the failed Executive Life Insurance Company. In a statement he deplored the last minute settlement reached between the French government’s CDR, Credit Lyonnais and other defendants and the California Department of Insurance. Although Artemis had earlier settled criminal charges brought by the U.S. Attorney’s Office in Los Angeles for $110 million, Pinault has steadfastly refused to settle the civil case. The other defendants agreed to a settlement just before the civil trial was scheduled to start. Originally reported to be in the $525 million range, the amount is slightly higher at $600 million. News reports have indicated that Pinault has offered as much as $260 million, but the CDI is asking for $445 million. His attorneys have pointed out that Artemis wasn’t even formed when the Executive Life sale was concluded between the Commissioner John Garamendi and Altus Finance, the vehicle, which, it is now admitted, was controlled by Credit Lyonnais to avoid federal and California restrictions on banks owning insurance companies. Artemis subsequently bought both Executive Life–since renamed Aurora Life–and the junk bonds. The CDI claims Pinault made $2 billion on the deal at the expense of policyholders. Pinault has also argued that former and present Insurance Commissioner Garamendi, who is scheduled to testify at the trial, was fully informed concerning all the parties to the transaction, and that it was an arm’s length deal with no illegal implications.