Several months ago I was approached by someone "in the know" to pull my posts about Executive Life of New York. Similar requests were made of fellow bloggers Mark Wahlstrom and Patrick Hindert. None of us did pull our posts. While I entered the structured settlement industry as ELNY was leaving the business (and thus my clients and I were fortunate to have "dodged the bullet"), I was intellectually curious and felt it important to share my research with those who were not receiving answers to their questions.
The would be "censor" characterized the number of structured settlement recipients affected as being in the hundreds. With the November 7, 2011 filing of Schedule 1.15 for the proposed Executive Life of New York (ELNY) Restructuring Agreement with the Supreme Court of Nassau County New York, it is clear that the representation to me and presumably to Wahlstrom and HIndert, has proved to be inaccurate.
Notwithstanding a party line that "this is an Executive Life of New York problem not a structured settlement problem" the stark reality about the ELNY proposed plan of liquidation is this:
43% of the outstanding annuities in ELNY estate are structured settlement annuities
5.9% are Single Premium Immediate Annuities (SPIA)
51.1% are Pension Annuities
Of the ELNY annuities that will experience shortfalls under the proposed Executive Life of New York (ELNY) Restructuring Agreement with the New York State Supreme Court, Nassau County:
97% are structured settlement annuities
2% are SPIAs
1% are Pension Annuities
Of the 1502 structured settlement annuities that are projected to have shortfalls
73.2%(1100) have uncovered shortfalls in excess of $100,000 present value
15% (227) have uncovered amounts in excess of $1,000,000, including"
- 17 with uncovered amounts in excess of $5,000,000
- A single structured settlement annuity has an uncovered amount of $25,692,377 present value.
The total amount of "contract value" protected will vary from 34% to 100%
In his November 27, 2011 blog ELNY Liquidation- 3 Patrick Hindert states that Schedule 1.15 indicates shortfalls ("uncovered amounts") will occur for the annuities even assuming state guaranty association contributions and enhancements
A hearing on the proposed plan of liquidation is set for "The Ides of March" 2012 (3/15/2012)
The Executive lIfe of New York liquidation has been described by some in the industry as a "train wreck". Yet, despite the 1895 Montparnasse tragedy (depicted above), people have continued to travel by rail.
- People continue to fly despite aircraft accidents. For example 71 fatal air crashes involving the Boeing 737, yet the 737 has been cited has the most numerous and reliable passenger jet aircraft in the world. On November 17, 2011 Boeing announced a deal with Indonesia based Lion Airlines that includes 29 737-900s, 201 737 MAX and options for 150 more planes in the future. The company remarked that " with 230 airplanes at a list price of $21.7 billion, this deal when finalized will be the largest commercial airplane order ever in Boeing’s history by both dollar volume and total number of airplanes". This came just days after USA Today reported a Boeing 777 aircraft order from Emirates that was described as "the largest commercial order in terms of dollar amount that it Boeing has ever received".
- People continue to work in tall skyscrapers despite a bunch of terrorists who executed on an idea to fly commercial airliners into them on 9/11/2001
- Visitors to London, including this author, still ride the bus and Tube despite the events of 7/7/2005
- People still order hot coffee from McDonalds
- People still take cruises despite the Titanic, Achille Lauro, rogue waves and Somali Pirates
- People still buy Firestone Tires and Ford Explorers
- People still live in flood zones and in tornado alleys despite disaster
- People will still trust investment advisers after Bernie Madoff
- Surfers continue to "shoot the curl" at beaches where there have been shark attacks, despite the fear of lurking sharks that want to eat them
Is it because we never learn or is it because a tragedy is often followed by an examination and investigation which foments improvements in safety , education and/or regulation?
There is no need to sugar coat anything with respect to the Executive Life of New York proposed liquidation, in my opinion. There is plenty of information here and elsewhere to learn what led to the downfall of ELNY 20-25 years ago and what has happened in the ensuing years that has led to its proposed liquidation. We know that the the factors that gave rise to ELNY are not likely to happen again in the future.