A partial settlement has been reached in a lawsuit filed on behalf of about 100 policyholders of companies that invested with disgraced financier, Bernard Madoff. Bloomberg.com reported that the partial settlement was reached by Insurers Argus Group Holdings Lts. and Tremont International Insurance Ltd., citing court records.
According to the lawsuit, insurers Argus Group Holds and Tremont International Insurance are, in fact, liable to its policyholders who have specific annuities or life insurance policies, said Bloomberg.com. Because the insurers invested with bogus Madoff feeder funds, there is potential liability for fraud and breach of duty. Citing the accord, Bloomberg.com reported that Argus International Life Bermuda Ltd. will be providing low-interest loans to those policyholders whose policies could lapse and whose policies relied on Madoff investments for premium payments—low-interest loans.
The cases involved in the settlement were filed on behalf of policyholders with Argus and Tremont Insurance whose investment was placed by the insurers in a variety of Tremont Group Holdings funds, said Bloomberg. The issue occurred because the Tremont Group Holding funds were invested with Madoff.
The settlement does not provide for cash payments, said Bloomberg.com, and was apparently reached in this manner because of the “difficulty of establishing jurisdiction over the Bermuda-based” defendants and of “establishing their liability and recovering damages,” citing court papers, which have been filed in Manhattan federal court.
The cases are part of a group of lawsuits against Tremont Group Holdings and related to the Madoff Ponzi scam, said Bloomberg.com, which explained that Tremont Group Holdings is a hedge-fund firm owned by Massachusetts Mutual Life Insurance Co.
Bloomberg noted that Banco Santander SA, Spain’s largest bank, agreed earlier this year to pay $235 million to Irving Picard. Picard is the court-appointed trustee assigned to liquidate Bernard Madoff’s investment business—Bernard L. Madoff Investment Securities LLC.
Yesterday, we wrote that Picard is looking to go after charities to collect “profits” they made from their investments with the admitted scammer. Madoff, 71, was recently sentenced to 150 years in prison for running a massive Ponzi scheme that is estimated to be the largest in history, costing investors some $65 billion. Proceeds from the liquidation are intended to restore some of these lost funds.
Bloomberg.com previously reported that Picard could sue charities that received more money than they invested with Madoff. Picard is legally required to file clawback lawsuits against those investors who profited from the Ponzi fraud, whether or not those investors were aware of the scheme, said Picard, who added that charities are not excused from the “avoidance actions,” according to Bloomberg.com.
One charity being looked at is Hadassah, a Jewish organization that builds hospitals in Israel, explained Bloomberg.com. It seems that, according to someone familiar with the situation, Hadassah invested $40 million with Madoff, but took $130 million in profits, said Bloomberg.com. Of note, Sheryl Weinstein, who was a former chief financial officer who resigned her post in 1997 authored a book published last month in which she alleges she was once a lover of Madoff, reported Bloomberg.com.
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