Venture Capital Firm Sues MIB

However, the complaint says, the process can take up to eight weeks, during which time many policy applicants experience “buyers’ remorse” and cancel their applications before a policy can be issued.

This costs the life insurance industry some $4 billion annually, the complaint says.

MIB, according to the complaint, wanted to create an Internet-based system that would allow agents to have access to MIB’s database and bind policies immediately, thus minimizing attrition rates.

The complaint says e-Financial Ventures agreed to invest in the project, the amount eventually reaching $4.5 million, subject to certain conditions.

E-Financial Ventures believed MIB would remain “fully and completely” committed to e-Nable, not compete with e-Nable, and not take any actions inconsistent or contrary to e-Nable’s best interest, the complaint says.

In addition, the complaint alleges, MIB told the plaintiffs it had revenue sources and signed contracts that did not exist.

The complaint adds that MIB did not disclose that its technology team was not able to establish a functional exchange platform.

Moreover, the complaint says, MIB decided to develop its own real time access technology as a separate platform from e-Nable, thus breaching its duty not to compete with e-Nable.

The complaint says e-Financial Ventures now stands to lose its entire investment. In addition, the complaint says, e-Financial Ventures has suffered tens of millions of dollars in consequential damages because of its link to a “failing company.”

Finally, the complaint says, MIB caused e-Financial Ventures “severe damage” in terms of its image and standing in the capital markets.