- Executive Life Insurance Company of New York (ELNY) Appeal Denied, Further Appeal Sought
- March 19, 2013 | Authors: Michael J. Miller; Timothy J. O'Driscoll
- Law Firm: Drinker Biddle & Reath LLP - Philadelphia Office
The long ELNY saga continues, at least for the time being, with two recent developments.
First, in a decision dated February 6, 2013, the Supreme Court of the State of New York, Appellate Division found that ELNY payees who had appealed the trial court’s April 16, 2012 Order of Liquidation and Approval of the ELNY Restructuring Agreement had not been denied due process during the trial court proceedings, and that there was no merit to their contention that the trial court lacked jurisdiction to grant the New York Superintendent of Financial Services (Superintendent) judicial immunity and injunctive relief.
Then, on March 8, 2013, the payees filed a Motion for Leave to Appeal to the New York State Court of Appeals (Motion), seeking a reversal of the Appellate Division’s decision. The return date on the Motion, which is the date by which any answering papers must be served and filed with the Court of Appeals, is March 25, 2013. Because the closing of the Restructuring Agreement is conditioned upon the absence of a pending appeal challenging the Restructuring Agreement, the filing of the Motion creates uncertainty as to when closing may occur.
While the trial court ordered the Superintendent to continue to direct the full payment of all benefits under all ELNY annuities until the closing of the Restructuring Agreement, many ELNY annuity owners want to know what they can do to protect their interests in connection with the approximately 1,500 ELNY annuities that ultimately are expected to have shortfalls (meaning less than the full amount of the annuity payments would be covered under the Restructuring Agreement), and when they need to do it. A significant issue in this regard is Schedule 1.15 to the Restructuring Agreement, which sets forth in detail the amount of benefits that would be allocated to each of the ELNY annuities, and the amount of the shortfalls on which annuity owners would be exposed. The Superintendent filed the original version of Schedule 1.15 in November, 2011, but it has not yet been finalized. To the extent annuity owners understand the amount to which they are entitled under the various guaranty association acts, annuity owners can compare that amount with the amount of the benefits allocated under the Restructuring Agreement. We have performed this analysis for a number of annuity owners, as well as the related analysis of how exposure on any shortfalls may be reduced or eliminated.