Greg Lindberg, the North Carolina insurance and business executive now awaiting sentencing on a bribery conviction, can’t escape a $524 million arbitration and civil judgment against him, a federal appeals court decided this week. Also this week, the state Supreme Court dismissed his challenge in a separate case, finally allowing liquidation of two of his life insurance companies.
The 4th U.S. Circuit Court of Appeals upheld a federal district court’s ruling, which had enforced the half-billion-dollar arbitration award from 2020, an award that is growing by the day due to interest.
The case is one of many that Lindberg is facing after unorthodox and allegedly illegal movement of assets from some of his former insurance companies. The latest court ruling involves Universal Life Insurance Co., which in 2017 entered into a reinsurance contract with Private Bankers Life and Annuity Ltd. (PBLA), a company that Lindberg owned, the court explained.
He also personally guaranteed the reinsurance agreement.
In early 2020, the court filings contend, Universal Life entered into arbitration proceedings against PBLA, charging that Lindberg had drained more than $524 million in assets from the Universal trust account and had replaced them with non-conforming assets.
The arbitration panel awarded $524 million but PBLA did not pay up. Universal took it to federal court in North Carolina, as prescribed by the guaranty agreement, the appeals court explained. The district court granted Universal’s request for summary judgment, ordering Lindberg to pay the full amount.
“The court observed that the guaranty agreement contained unambiguous language regarding Lindberg’s obligation to cover PBLA’s obligations under the reinsurance agreement, finding that ‘there is no ambiguity and no genuine issue of material fact as to . . . [the] issues on [Universal’s] breach of contract claim,'” the appellate judges noted.
The 4th Circuit panel found no error in the lower court’s reasoning and rejected Lindberg’s appeal.
Universal has dropped a similar state-court action, on appeal to the North Carolina Supreme Court, which included an effort to stop Lindberg from dissipating assets of the insurer, according to The Carolina Journal and court documents.
Lindberg in May was convicted a second time of attempting to bribe North Carolina Insurance Commissioner Mike Causey, in exchange for relaxed regulations that would have allowed Lindberg to keep less reserve funding in his life insurance companies. The first conviction was reversed due to erroneous jury instructions, an appeals court found.
The sentencing has been delayed while Lindberg’s attorneys and prosecutors spar over forfeiture of some of Lindberg’s assets. The judge last week agreed to an extension to give prosecutors time to respond to defense filings.
Earlier this month in a separate civil suit, a federal judge in North Carolina ordered Lindberg and three of his companies to pay almost $167 million to an insolvent life insurance company based in the Netherlands. The ruling upheld a 2020 arbitration award.
In yet another Lindberg case, the North Carolina Supreme Court on Aug. 23 dismissed a request by a Lindberg company to review a court decision to place his former Colorado Bankers Life and Bankers Life insurance companies into liquidation. The ruling is something unpaid policyholders have long been hoping for.
“The Supreme Court’s decision to dismiss the baseless appeal of the order placing Colorado Bankers Life and Banker’s Life into liquidation opens the door for policyholders to finally receive long-overdue relief from the various state guaranty associations,” Commissioner Causey said in an email. “As this process unfolds, I will continue to aggressively pursue every option to ensure that all the policyholders are repaid.”
Policyholders with questions should contact their respective companies in the coming days and weeks, he noted. For Colorado Bankers Life policies, the phone number is 1-833-658-2841 and for Bankers Life policies the number is 1-833-658-2840.
Background: NC Appeals Court Gives Green Light to Liquidation of Lindberg Insurance Firms
Topics Carriers North Carolina
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