Greg Lindberg loses appeal against Universal Life Insurance Company
Greg Lindberg loses appeal against Universal Life Insurance Company | Insurance Business America
Legal Insights
Greg Lindberg loses appeal against Universal Life Insurance Company
No error found in “well-reasoned” decision
Legal Insights
By
Terry Gangcuangco
“We find no error in the district court’s well-reasoned ruling.”
Those were the words of the United States Court of Appeals for the Fourth Circuit in its opinion affirming a district court’s order against insurance billionaire Greg Lindberg. Losing his appeal in the case against Universal Life Insurance Company (ULICO), Lindberg is on the hook for $524 million plus interest.
The insurance billionaire was accused of ‘draining’ more than $524 million cash-equivalent assets from the ULICO trust account after Lindberg entered into a guaranty agreement with the organization during the same time that he and his firm Private Bankers Life and Annuity (PBLA) sealed a reinsurance agreement with ULICO.
PBLA was subsequently ordered to pay ULICO $524,009,051.26 in 10 days. The arbitral award was confirmed by a final judgment in the US District Court for the Southern District of New York.
The 4th US Circuit Court of Appeals noted: “When PBLA failed to pay the arbitration award within the prescribed time, ULICO filed a breach of contract action against Lindberg in the United States District Court for the Middle District of North Carolina, the venue prescribed by the guaranty agreement.
“After discovery, ULICO filed a motion for summary judgment where it argued that the arbitral award was conditioned on a breach of the reinsurance agreement, which unlocked Lindberg’s obligations under the guaranty agreement. The district court granted ULICO’s motion for summary judgment.”
That decision by the district court has been affirmed, marking the unsuccessful appeal by Lindberg.
Notably, it was found that the guaranty agreement contained unambiguous language regarding the insurance billionaire’s obligation to cover PBLA’s obligations under the reinsurance agreement.
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