News from Bermuda as of
|
Bermuda insurers reach partial accord in Madoff lawsuit
|
| Published on Wednesday, September 2, 2009 | Email To Friend Print Version
|
By David Glovin
NEW YORK, USA (Bloomberg) -- Bermuda-based insurers Argus Group Holdings Ltd. and Tremont International Insurance Ltd. reached a partial settlement of a lawsuit on behalf of policyholders over the companies’ investment with Bernard Madoff, court records show.
The lawsuit claims the insurers are liable to policyholders with certain annuities or life insurance policies for fraud and breach of duty because the insurers invested with so-called Madoff feeder funds. The accord says that Argus International Life Bermuda Ltd. will provide low-interest loans to policyholders whose policies may lapse. The policies relied on the Madoff investments to pay premiums.
The settlement, which provides for no cash payments, was reached due to the “difficulty of establishing jurisdiction over the Bermuda-based” defendants and of “establishing their liability and recovering damages,” the plaintiffs said yesterday in court papers in Manhattan federal court.
The settling cases are part of a larger group of Madoff- related investor lawsuits against Tremont Group Holdings, a hedge-fund firm owned by Massachusetts Mutual Life Insurance Co. The settling cases are on behalf of Argus and Tremont Insurance policyholders whose investment was placed in various Tremont Group Holdings funds, which in turn invested with Madoff.
The settlement is among the first in Madoff-related litigation. Banco Santander SA, Spain’s biggest bank, agreed in May to pay $235 million to the trustee liquidating Bernard Madoff’s defunct money-management firm to settle claims related to Madoff investments by two of its hedge funds. Other funds that invested with Madoff also have been sued.
“This is an important first step for getting relief for people who had exposure to Madoff through Tremont,” Demet Basar, a lawyer for the policyholders, said in an interview today.
About 100 policyholders will benefit from the accord.
The Argus settlement, which provides that the defendants will assign their legal claims against others to a litigation trust, needs court approval.
Joel Haims, a lawyer for Argus, didn’t immediately return calls. Montieth Illingworth, a spokesman for Tremont Group, didn’t have an immediate comment. Tremont Group isn’t settling. Argus acquired Tremont International Insurance from Tremont Group.
Madoff, 71, is in a medium-security federal prison in Butner, North Carolina. He pleaded guilty in March to masterminding the largest US Ponzi scheme, costing investors billions of dollars, and was sentenced to 150 years in prison. | | | | Reads : 813 | | | |
|
|
More news from Bermuda...
|
