Court throws out award in Executive Life case

A California federal appeals court has overturned a $241 million award given to the state in a lawsuit arising from its 1991 takeover of the now-defunct Executive Life Insurance Co. A district court retrial of the damages phase has also been ordered. A 2000 lawsuit by California’s insurance commissioner Steve Poizner had accused Artemis SA, a Paris-based holding company, of plotting to dodge state and federal laws to purchase the failed insurer’s junk bond portfolio and other assets in a state sale of Executive Life in 1991. Artemis was added to a list of other parties in a pre-existing suit. Other defendants named in the case included Credit Lyonnais of Paris, which is controlled by the French government, and other individuals and entities. They paid $700 million to settle the case. A federal jury in Los Angeles also found Artemis liable for conspiring to commit fraud in 2005 and awarded the state $700 million in punitive damages, but no compensatory damages. That award was later tossed, and Artemis was ordered to pay the $241 million, which Judge Jay Bybee said should be reconsidered.