The Rise of Broad -Based Leveraged Corporate Owned Life Insurance: Litigation Update
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This teleseminar will address the history and status of broad-based corporate owned life insurance ("COLI") litigation, and explore avenues available to policyholders for recovery of COLI premiums paid. These COLI plans, christened by the media as “janitor’s insurance” and “dead peasant policies,” were designed to span several decades and promised returns approaching, and in some cases exceeding, ten figures. Not surprisingly, such numbers made them very attractive to large corporations. Though exact figures are unknown, some estimates suggest that more than half of the Fortune 500 purchased this type of COLI.
In recent years, the COLI bubble has burst. Specifically, since 1999, the Internal Revenue Service has prevailed in three separate trials against corporate taxpayers who had claimed millions in COLI-related deductions. In each trial, the COLI programs at issue were found to be tax shams. As a result of these suits, corporations have hastened to unwind their programs and settle their COLI-related deduction disputes with the IRS.
Last September Wal-Mart, the nation’s largest purchaser of broad-based, leveraged COLI, filed suit against the brokers and carriers who promoted and sold its COLI program. In recent months Eastman Kodak has followed suit. Morgan Lewis has been representing many of the largest COLI claimants and will provide an informative look at how these claims are structured.
SPEAKERS
Michel Yves Horton, Insurance Recovery
Michel Yves Horton is a partner of the Insurance Recovery practice resident in the Los Angeles office. His practice involves a variety of commercial litigation with an emphasis on insurance coverage disputes and product liability defense in both federal and state courts. Mr. Horton has served as lead/trial counsel in complex insurance coverage matters, including ITT Industries, Inc., ConocoPhillips, UNR Industries, Inc., Fuller-Austin Asbestos Settlement Trust, and Kaiser Steel Corporation. Mr. Horton also advises clients generally on insurance matters, including environmental coverage, directors' and officers' coverage and similar issues including broad-based COLI programs. Mr. Horton also works on behalf of policyholders in the negotiation and drafting of complex environmental/toxic tort manuscript insurance policies with various insurance brokers and insurance companies.
Christopher C. Loeber, Insurance Recovery
Christopher C. Loeber is an associate in the Insurance Recovery practice resident in the New York office.
Mr. Loeber represents Fortune 500 and similar insureds in complex insurance coverage disputes with a focus on matters involving broad-based leveraged COLI and CGL, E&O and First Party Property insurance policies. Prior to joining Morgan Lewis, Mr. Loeber represented multinational insurance carriers in state and local courts throughout the country with a focus on intellectual property and environmental coverage disputes.