Warning: Use of undefined constant REQUEST_URI - assumed 'REQUEST_URI' (this will throw an Error in a future version of PHP) in C:\xampp\htdocs\mbc1\wp-content\themes\jannah4\functions.php on line 73
Insurance coverage Officers Pursue Management of A few of Greg Lindberg's Companies – jj

Insurance coverage Officers Pursue Management of A few of Greg Lindberg's Companies


North Carolina insurance officials are seeking appointment of a temporary receiver to take control of numerous private companies owned by insurance executive

Greg Lindberg,

newly unsealed state court documents show.

Mr. Lindberg’s private companies owe $1.3 billion to four insurers formerly under his control and $2.1 billion overall, the documents show. State Insurance Commissioner

Mike Causey

took control of those insurers in June based on concerns about their financial health, with court approval.

Mr. Lindberg failed to live up to a written agreement to reorganize many of his private entities by Sept. 30, 2019, under a new holding company that would be run by an independent board for the benefit of the insurers, according to an October amended complaint that was among the unsealed documents. The complaint also seeks an order forcing compliance with the prior agreement.

A Wake County, N.C., judge last week ordered that the court documents be unsealed and they became publicly available this week.

The named plaintiffs in the legal action are the insurers that are under state control, and the defendants are Mr. Lindberg and several of his private entities.

The state-controlled insurers said in one filing they believed certain of Mr. Lindberg’s private companies “are being mismanaged and that at least some of their operating income is being diverted for Lindberg’s personal use.”

The insurers cited a rapid drawdown of a $40 million line of credit, and demands by Mr. Lindberg for management fees and for “improper payment of personal expenses” including an airplane lease and funds for his personal public-relations consultant.

The companies that were supposed to be restructured face an “urgent cash flow crisis,” the insurers said in a different filing.

A spokesman for Mr. Lindberg said in a written statement: “The litigation is filled with inaccurate and reckless allegations and disregards the interests of the policyholders who rely on Mr. Lindberg’s companies to service their debts.” The spokesman added that none of Mr. Lindberg’s companies are in default on their obligations to the plaintiffs and “liquidity is strong.”

Mr. Lindberg said in the statement that the lawsuit was part of a “politically motivated” attack on him by Commissioner Causey, adding “the false accusations” against me have hurt every one” of his group’s 8,500 employees “by hindering our access to credit markets, harming our brand, slowing down our acquisitions, and costing us tens of millions of dollars of unnecessary legal fees and other expenses.”

Mr. Causey couldn’t be immediately reached. He has said previously that he took control of the insurers because of concerns raised by his department’s financial analysis of the Lindberg insurers.

Mr. Lindberg and his insurance empire were the focus of a February 2019 investigative article in The Wall Street Journal. The article revealed that insurers controlled by Mr. Lindberg had loaned more than $2 billion to affiliated entities owned by the entrepreneur, using opaque entities as middlemen.

Mr. Lindberg separately is facing trial in February on federal criminal charges that he tried to bribe the North Carolina insurance commissioner. The entrepreneur has pleaded not guilty.

Federal prosecutors and the Federal Bureau of Investigation are “conducting a separate criminal investigation into potential financial fraud within the Lindberg-related entities,” and a state-appointed official overseeing the insurers has received a grand-jury subpoena related to that probe, the October amended complaint said.

Under an agreement signed in June when the state took control of the four insurers, Mr. Lindberg’s companies didn’t have to make principal or interest payments on the debt they owed to the insurers until the second quarter of 2020. That meant the lenders didn’t collect about $100 million that would otherwise have been due by late October, the filings say.

Under the new holding company, Mr. Lindberg would be one of seven directors.

Mr. Lindberg “desperately wants to retain control of the affiliated companies that he agreed to transfer to the new holding company” the insurers’ complaint says.  But “it is impossible to undertake an orderly analysis and restructuring of the affiliated companies’ debt obligations” without the new structure, it maintains.

The plaintiffs said in the court filings that Mr. Lindberg has proposed selling two units, but the transactions were at depressed prices and were structured in a way that would “individually profit Lindberg and his business colleagues.”

Write to Mark Maremont at mark.maremont@wsj.com and Leslie Scism at leslie.scism@wsj.com

Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source link

Related Articles

Leave a Reply

Back to top button