North Carolina officials have filed a suit against Greg Lindberg and some of his companies, Lindberg reported Wednesday.
A state court judge in Wake County, North Carolina, approved an order putting four insurance companies affiliated with Lindberg in rehabilitation, and appointing North Carolina Insurance Commissioner Mike Causey as the receiver, in June.
Lindberg identified the main plaintiff in the new case against him as Causey.
The North Carolina Department of Insurance said that plaintiffs in the case are the insurers companies that were placed in rehabilitation: Southland National Insurance Corp., Bankers Life Insurance Company, Colorado Bankers Life Insurance Company and Southland National Reinsurance Corp.
The defendants are Greg Lindberg, Academy Association Inc., Edwards Mill Asset Management LLC, New England Capital LLC, and Private Bankers Life and Annuity Co. Ltd., according to the North Carolina department.
Causey and the North Carolina department are not parties to the case, according to the North Carolina department.
The four plaintiffs in the new case are part of the Global Bankers Insurance Group. Global Bankers is part of Eli Global. Eli Global is owned by Greg Lindberg, according to a report on the insurers filed with the Wake County, North Carolina, Superior Court in August.
- Links to some documents related to the rehabilitation of Colorado Bankers Life and its sister companies are available here.
- A set of the rehabilitators’ answers to questions frequently asked by producers is available here.
- Greg Lindberg’s press releases about litigation and other matters are available here.
Global Growth LLC is the successor company to Eli Global, according to a press release Global Growth issued in September 2019.
Lindberg says the new legal action again him and his companies was filed Oct. 1, 2019, but that parts of the actions were only recently unsealed.
North Carolina pleadings and dockets are not available online. Reporters at The Wall Street Journal have reported, in an article published behind a paywall, that the plaintiffs in the new legal action are seeking to change the terms of an agreement reached in June 2019, and to get a temporary receivership over hundreds of private companies owned by Lindberg, because, according to the plaintiffs, Lindberg had not completed a proposed reorganization of some entities by a Sept. 30, 2019, deadline included in the June agreement.
The insurers that are acting as the plaintiffs in the case say Lindberg’s private companies owe them $1.3 billion, according to the Wall Street Journal reporters’ summary of court documents associated with the case.
Lindberg commented on the North Carolina litigation in a press release.
Lindberg called the new litigation irresponsible and said the allegations in the pleadings are inaccurate.
Lindberg said he believes that he and his companies are being attacked because he raised money for Causey’s opponent in North Carolina’s 2016insurance commissioner election.
“Mr. Lindberg’s companies are not in default on any of their loans to the plaintiffs, and liquidity is strong,” according to Lindberg’s press release. “Global Growth’s non-insurance companies have over $100 million of cash on hand, and Global Growth’s insurance companies have total cash and cash equivalents of over $1.4 billion.”
Global Growth’s main insurance holding company, GBIG Holdings, Inc., reported $62 million in net income for 2018 on a tax basis, Lindberg said.
Global Growth’s businesses should produce about $300 million in cash flow across all companies, on about $1.4 billion in revenue, according to Lindberg.
He predicted that the company will have about $121 million in cash available to pay senior debt service, and that the cash-pay senior debt interest coverage ratio will be close to 2.5 to 1.
The cash-pay senior debt interest coverage ratio will be at a level comparable to that for BB and B corporate bond issuers in today’s market, Lindberg said.
— Read Life Insurance Company Owner Faces Wall Street Journal Scrutiny, on ThinkAdvisor.