NC High Court allows liquidation of Lindberg insurers; He owes $524 million in the Fed case

North Carolina insurance and business executive Greg Lindberg, who is now awaiting sentencing on a bribery conviction, cannot escape a $524 million arbitration and civil judgment against him, this week ruled a federal appeals court. Also this week, the state Supreme Court rejected his appeal in a separate case, ultimately allowing two of his life insurance companies to wind up.

The 4th U.S. Circuit Court of Appeals upheld a federal district court’s ruling that enforced the half-billion-dollar 2020 arbitration award, which grows daily with interest.

The case is one of many facing Lindberg after the unorthodox and allegedly illegal movement of assets from some of his former insurance companies. The latest court ruling involves Universal Life Insurance Co., which in 2017 entered into a reinsurance contract with Private Bankers Life and Annuity Ltd. (PBLA), a company owned by Lindberg, the court explained.

He also personally guaranteed the reinsurance contract.

In early 2020, court filings allege, Universal Life entered arbitration proceedings against the PBLA, alleging that Lindberg drained more than $524 million in assets from Universal’s trust account and replaced them with non-compliant assets.

The arbitration panel awarded $524 million, but PBLA did not pay. Universal took it to federal court in North Carolina, as required by the warranty agreement, the appeals court explained. The district court granted Universal’s motion for summary judgment, ordering Lindberg to pay the full amount.

“The court noted that the warranty agreement contained unequivocal language regarding Lindberg’s obligation to cover PBLA’s obligations under the reinsurance agreement, finding that “there is no ambiguity and no genuine issue of material fact as to . . . (a) the issues regarding (Universal’s) breach of contract claim,’” the appeals judges noted.

The 4th Circuit found no error in the lower court’s reasoning and dismissed Lindberg’s appeal.

Universal dropped a similar state court action on appeal to the North Carolina Supreme Court, which included an effort to prevent Lindberg from dissipating the insurer’s assets, according to The Carolina Journal and court documents.

In May, Lindberg was convicted a second time of trying to bribe North Carolina Insurance Commissioner Mike Causey in exchange for relaxed regulations that would have allowed Lindberg to keep less reserve funds in the companies his life insurance. The first conviction was overturned because of faulty jury instructions, an appeals court found.

Sentencing has been delayed while Lindberg’s lawyers and prosecutors wrangle over the seizure of some of Lindberg’s assets. The judge last week agreed to an extension to give prosecutors time to respond to the defense’s case.

Earlier this month, in a separate civil suit, a federal judge in North Carolina ordered Lindberg and three of his companies to pay nearly $167 million to an insolvent life insurance company based in the Netherlands. The ruling upheld a 2020 arbitration award.

In another Lindberg case, the North Carolina Supreme Court on Aug. 23 denied a request by a Lindberg company to review a court order to liquidate his former insurance companies Colorado Bankers Life and Bankers Life. The ruling is something unpaid policyholders have long hoped for.

“The Supreme Court’s decision to dismiss the meritless appeal of Colorado Bankers Life and Banker’s Life’s liquidation order opens the door for policyholders to finally receive long-overdue relief from the various state guaranty associations,” Commissioner Causey said in – an email. “As this process unfolds, I will continue to aggressively pursue all options to ensure that all policyholders are reimbursed.”

Policyholders with questions should contact their companies in the coming days and weeks, he noted. For Colorado Bankers Life policies the phone number is 1-833-658-2841 and for Bankers Life policies the number is 1-833-658-2840.

Background: NC Court of Appeals gives green light to liquidation of Lindberg Insurance Firms

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North Carolina Carriers