NU Online News Service, Oct. 22, 3:50 p.m. EDT
Oklahoma Insurance Commissioner Kim Holland is seeking to get back about $102 million from all those involved in the acquisition of a now-insolvent insurance company.
According to a petition filed in Oklahoma County District Court, Commissioner Holland, now the receiver of Park Avenue Property and Casualty Insurance Company, alleged there was a "conspiracy to loot the insurance company" and violate state law, "causing the failure of Park Avenue" and putting policyholders in danger.
Park Avenue is a wholly owned subsidiary of Park Avenue Insurance LLC (PAI), owned by Charles Antonucci, who on Oct. 8 pleaded guilty to a conspiracy with others to purchase the insurer by using its own assets as leverage, according to court documents.
By using Park Avenue's bond portfolio as collateral in a transaction to purchase it, the insurer immediately went insolvent.
Commissioner Holland is now in charge of settling the company's remaining assets and debts.
Under state statute, the bond portfolio transfer was fraudulent because Park Avenue received no consideration for the loss of its bond portfolio, court records show.
Two years ago PAI agreed to purchase Park Avenue from Providence Holdings Inc. for $37.5 million financed by Park Avenue Bank, where Mr. Antonucci served as president and majority stakeholder.
At least that is what Commissioner Holland said her office was told. The undisclosed financing plan was for broker Oppenheimer & Co. to finance the transaction, with Park Avenue's bond portfolio as collateral, according to Commissioner Holland's petition.
Oppenheimer became the custodian of Park Avenue's $55 million bond portfolio, then loaned PAI the money to purchase the insurer from Providence Holdings, Commissioner Holland alleged.
After being appointed receiver, Commissioner Holland voided the transfer and demanded Oppenheimer return the portfolio, but instead the broker allegedly liquidated the assets to pay itself back for the loan to PAI and then returned what was left–about $8 million, the lawsuit said.
Oppenheimer is named in the lawsuit along with Mr. Antonucci and Providence Holdings and its majority owner, Falcon Holdings. Also named are the owners of each holding company and board members at Oppenheimer.
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