FOLLOW US

On Monday, convicted insurance magnate Gregory Lin Berg faced a fresh setback as the Fourth Circuit ruled that he is responsible to pay a $524 million arbitration award in a dispute over reinsurance arrangements.

The panel upheld the North Carolina district court’s summary judgment ruling in favor of Universal Life, concluding that guaranty agreement was clear on Lindberg' s responsibility to cover PBLA' s obligations. The panel praised the lower court's ruling as " well-reasoned."

The dispute arose from a business accord entered into by Lindberg' s company, Pacifc Bankclamation and Trust, with Universal Life. According that agreements, Lindberg was supposed to deposit Hundreds of millions of dollars into a trust to pay insurance clients and satisfy other regulatory obligations. However, Universal Life complains that Lindberg sank the money for personal use--including yachts, private planes and mansions in Switzerland or Russia.

After learning of Linderberg's activities, Universal Life initiated arbitration and was awarded $524 million (in a decision confirmed by a New York federal court). It tried to enforce the award in North Carolina, where Lindberg' s companies were based. However, despite many court orders demanding payment, Lindberg continued to appeal.

In a separate lawsuit, a North Carolina trial court appointed a receiver over Lindberg's finances, a decision that he has taken to the state Supreme Court. According to Universal Life, the $524 million award generates interest of $32,000 a day.

Lindberg also faces numerous lawsuits from other insurers and creditors, including a Dutch insurer that received $166 million and some insolvent insurers that allege he owes them $100 million or more. In addition, the U.S. Securities and Exchange Commission accuses Lindberg of embezzling $75 million from clients--an allegation he is battling. In a jury trial last June, he was found guilty of fraud and bribery as part of a scheme to corrupt North Carolina's insurance commissioner.

The case is Universal Life Insurance Co. v. Lindberg, case number 23-1313, in the U.S. Court of Appeals for the Fourth Circuit.