Tens of thousands of people whose money has been in limbo since 2019 as the state tussles with a billionaire accused of fraud may get some of their investments back soon.
Last week a superior court judge overseeing part of the saga ordered one of the companies involved to pay annuity holders 25% of their policies, which is expected to total about $444 million. The decision affects about 65,000 annuity contracts held by Colorado Bankers Life Insurance Co.
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Judge Graham Shirley is also considering a motion to order similar payments for Bankers Life Insurance Co. customers, a separate entity that has much of its assets tied to a reinsurance agreement with Colorado Bankers Life Insurance.
Both companies are owned by indicted financier Greg Lindberg through a holding company called Global Growth, which was formerly Eli Global. Lindberg, once North Carolina’s largest political donor, is awaiting a second federal trial on charges that he tried to bribe the state’s insurance commissioner.
He also faces federal charges of financial fraud and a Securities and Exchange Commission complaint accusing him of setting up complex transactions to mask that he was spending insurance company money as if it were his own.
Lindberg has denied the accusations against him. His long-time attorney didn't immediately respond to an email Monday seeking comment on the latest development, but Lindberg's legal team didn't try to block the motion to order partial payments at Colorado Bankers Life, signaling that they will go forward.
In 2019, with questions about what Lindberg had done with company assets, Insurance Commissioner Mike Causey took control of three insurance companies and one reinsurance company the Durham businessman owned in North Carolina. A moratorium was put in place, severely limiting withdrawals and leaving policy holders in limbo.
Last year Shirley granted liquidation of the companies, which would trigger payouts by state guaranty associations. Lindberg appealed that decision, delaying the process. He and his team have argued they can turn these companies around and make policyholders whole and that Causey’s office and the team he brought in to oversee the companies are blocking them.
As part of these proceedings in 2022, Shirley determined that Lindberg had defrauded his own insurance companies and reneged on a deal that had been meant to avoid liquidation and recoup a $1.2 billion shortfall.
Colorado Bankers customers will get a letter explaining the 25% distribution process, Shirley’s order states. Customers can opt out to avoid a surrender charge, but taking the money will let them move the funds to higher interest-bearing investments and allow them to get some of their money now “instead of waiting for liquidation, which has been delayed significantly by appeal,” the order states.
Bankers Life Insurance Company customers will also get a letter announcing their distribution, if the judge signs off on it.