RALEIGH — A businessman and political donor who was found guilty of attempting to bribe a state official is now the subject of a civil action surrounding an insurance company he controls. Greg Lindberg, an entrepreneur who is affiliated with dozens of businesses through his company Eli Global, has been sued by Universal Life Insurance Company (ULICO) over a personal guaranty Lindberg made to back PB Life and Annuity Company.
PB Life and ULICO were parties to a reinsurance agreement — a common transaction among insurance companies to spread out risk — struck in 2017. As part of the agreement, according to the lawsuit, Lindberg agreed to personal guarantee the financial arrangement and be on the hook if PB Life failed to meet its obligations to ULICO.
In January of 2020, ULICO alleged that PB Life was not in compliance with the reinsurance agreement because 65% of the investments of the trust fund were in loan obligations to affiliates of PB Life which exceeded the threshold of 10% established by the insurance code. ULICO demanded that PB Life deposit $524 million into an account to satisfy requirements of the reinsurance agreement and cure the alleged breach. According to the lawsuit, PB Life refused to make the deposit and ULICO then demanded that Lindberg pay up under the personal guaranty.
PB Life sued ULICO on March 16, 2020, to stop an arbitration proceeding instituted by ULICO. A federal judge ultimately allowed the arbitration to move forward and the arbitration panel sided with ULICO on June 2, 2020, and ordered PB Life to deposit $524 million in an account. On June 9, ULICO made demand on Lindberg under the personal guaranty.
In a July 31 response to the lawsuit, Lindberg blamed the situation on his ongoing battle with N.C. insurance commissioner Mike Causey, calling the litigation a “downstream effect” of damage done to his company by state regulatory action. “The fact is, the assets in the ULICO reinsurance trust are very well collateralized,” said Lindberg.
Lindberg’s statement called N.C. Dept. of Insurance statements about his companies’ assets “lies” and that some analysts and companies believed the statements. Lindberg said the credit rating firm AM Best decided to downgrade ULICO’s credit rating as a result of statements made in a Wall Street Journal article. “ULICO then attempted to recapture $500 million of assets that are currently in a reinsurance trust with one of our Bermuda insurers,” said Lindberg. “The fact is, the assets in the ULICO reinsurance trust are very well collateralized.”
Lindberg released a letter on July 30, 2020, written by Berkley Research Group which says Lindberg’s companies were damaged “in excess of $400 million” by the state agency actions to take over the companies. The letter also states Lindberg’s personal net worth to be “between $860 million and $1.46 billion, net of liabilities of between $2.6 billion and $2.7 billion including the debts of the Affiliated Companies.”
“There is no reason for ULICO to attempt a recapture of these assets via litigation other than AM Best’s reliance on Causey’s false statements,” said Lindberg. “We fully believe that once the court has a chance to review the valuations of our assets, as BRG has done, this case will be decided in our favor.”
Lindberg’s attorneys, with the Greensboro office of Fox Rothschild LLP, filed a motion Wednesday asking the court for more time to answer ULICO’s complaint. The court granted the motion and gave Linderg until August 21 to file his answer to the lawsuit on his personal guaranty.