LOS ANGELES - A California judge overseeing the Executive Life Insurance Co. case yesterday approved settlements that include an agreement covering about $50 million of tax-exempt bond issues.
The agreements pertain to Executive Life guaranteed investment contracts securing the tax-exempt bonds, which are generally referred to as "baby GICs," as well as to certain other products of the failed insurer.
California Insurance Commissioner John Garamendi crafted the settlement agreements to help remove opposition to his modified rehabilitation plan that calls for the sale of Executive Life to a French investor group led by Mutuelle Assurance Artisanale de France.
The latest settlement approvals leave one group opposing the rehabilitation plan. The group includes indenture trustees representing holders of about $1.6 billion of taxable municipal bonds which are also secured by Executive Life GICs.
Although Los Angeles County Superior Court Judge Kurt Lewin approved the settlements, he also issued a 10-day stay blocking release of any interim payments to the baby GIC parties.
Lawyers for the taxable muni-GIC bonds had requested the stay because they plan to ask a state appellate court to review a portion of the settlement that would put the baby-GIC holders on even footing with other policyholders for sharing in the rehabilitation plan. The taxable muni-GIC holders, say the baby GICs and similarly-situated products should have lower priority.