Kentucky Central Life (KY)
Summary Judgment Motion Pending
On January 5th the KCL Liquidator filed a motion for summary judgment on the issue of substantive consolidation in the Mid-Central litigation. The civil litigation was initiated on behalf of certain shareholders of Mid-Central Investment Company, Inc., a non-operating subsidiary of KCL. The shareholders are seeking to recover approximately $13 million against the assets of Mid-Central from which they argue they are entitled to be paid as preferred shareholders. The Liquidator has rejected the plaintiffs' demands on the grounds that KCL and Mid-Central were operated as a single business enterprise and that the assets of Mid-Central should be consolidated into the KCL estate and distributed in accordance with the statutory priority scheme.
At the request of the Liquidator, NOLHGA, the Illinois and Texas associations, and the Kentucky Public Employees Retirement Fund intervened in the proceedings for the purpose of supporting the Liquidator's request for transfer of the case to the liquidation court, and the Liquidator's motion for substantive consolidation of Mid-Central assets into the KCL estate. In June of 1998, the case was transferred to the liquidation court and procedurally consolidated with the ongoing liquidation proceedings. Since that time, the parties have proceeded with discovery. Briefing on the summary judgment motion is to be completed by April 1, 2001. No hearing has yet been scheduled on the Liquidator's motion for summary judgment.
Task Force Chair - John Colpean; Staff Contact - Joni Forsythe Kentucky Central Life (KY)4th Quarter 2000 KCL Expense Data
In other KCL news, requests for 4th Quarter 2000 expense data were distributed by fax to all affected guaranty associations on Wednesday, January 24th. Please complete the forms and return them to NOLHGA, Attention: Aimee Frye. The fax number is 703.481.5209. We ask that you please submit the requested information by February 13th.
Task Force Chair - John Colpean; Staff Contact - Joni Forsythe American Chambers Life (OH)Benefit Limit Updates Requested
It was recently determined that an update to a Guaranty Association's health insurance benefit limit effective prior to the American Chamber's liquidation was not reported properly. In order to correct any other errors, please provide any updates to your state's health insurance benefit limits to Anne Hancock by facsimile (630-353-1918) or email ([email protected]). Please provide the effective date of the updated benefit limit.
Task Force Chair - Chuck Gullickson; Staff Contact - AMS Life (AZ)Arizona Receiver to Settle Claims (Web Content Only)
In mid December of 2000, the Arizona Receiver for AMS Life reached a tentative agreement to settle claims against several defendants named in his fraud and professional malpractice action against various accounting and actuarial consulting firms that provided services to AMS Life prior to the commencement of the Receivership proceedings.
The proposed settlement calls for mutual releases to be signed by and between the defendants, each of the affected state guaranty associations, and by the Receiver. This settlement effectively resolves all of the Receiver's claims against William M. Buchanan & Associates, Inc., William M. Buchanan, Jeffrey S. Drake, R. Eric Newberg, John R. Miller, Frank Neidig and Unified Life Insurance Company, for a sum of $2.25 million, which when added to the settlements with other defendants in this litigation, brings the total recovery to date for this case to approximately $8.255 million. The affected guaranty associations are reviewing the release language at this time.
The proposed settlement agreement has been filed with the court for approval, and has been scheduled for hearing on March 5th. Assuming the settlement is approved, the case will proceed against the remaining defendants, which include J, Huell Briscoe & Associates and several individual defendants.
Task Force Chair - Luther Hill; Staff Contact - Joni ForsytheCalendar
February 1
NOLHGA Finance Committee Teleconference, 11 am
February 2
NOLHGA Audit Committee Teleconference, 2 pm
February 7
NOLHGA Compensation Committee meeting, Tysons Corner, VA
February 8
NOLHGA Board of Directors meeting, Tysons Corner, VA