Similar Determination Made in Wind Up Proceedings for Old Mutual (Bermuda)
Bermuda’s Chief Justice Narinder Hargun and Joint Provisional Liquidators (JPLs) are in agreement that representatives will be appointed for every creditor class in the liquidation proceedings for both Northstar Financial Services (Bermuda), Ltd. and Omnia, Ltd., which was formerly Old Mutual (Bermuda).
The Supreme Court of Bermuda also provided direction to the JPLs, after the latter determined that issues related to the assessment of asset segregation among the different kinds of investors could impact how much they all stood to recover.
Investors have been waiting for this September Notice to provide answers on what, if anything, might be recovered. Clearly, there are no answers, and the next hearing cannot be held until after October 21st, but more likely will not occur until later in the year.
Northstar Financial Services (Bermuda) and Old Mutual (Bermuda) were both acquired by Global
Bankers Insurance Group, which is owned by Greg Lindberg. The American billionaire is serving more than seven years in prison for conspiracy to commit wire fraud and bribery. Meanwhile, investors of both Bermuda-based entities are now scrambling to recover their losses.
Lindberg is known for taking funds from his insurance and annuity companies and placing them in US-based special purposes vehicles that he runs. North Carolina’s Department of Insurance, which seized control of his insurance companies after he was criminally indicted, claims that the businessman lent at least $2B from the insurers to other entities.
Thousands of Northstar Financial Services (Bermuda) Investors Have Lost Money
Northstar Financial (Bermuda), specifically, is estimated to have a more than $260M deficit and could report just $8M in assets by September 2021. A third entity that is also owned by Lindberg, PB Life and Annuity Co. Ltd., is also going through liquidation proceedings.
Now, hundreds of millions of dollars are at stake while thousands of Old Mutual (Bermuda) and Northstar (Bermuda) investors wait to recover their losses.
On September 3, 2021, Northstar Financial Services (Bermuda) sent a letter to policyholders related to the “representative” appointments which will be composed of an investor or creditor from each class. The selection of which investor will be a representative is determined by consensus between Chief Justice Hargin and the JPLs. Included in the letter was a list of the classes:
- Omnia/Northstar (Bermuda) investors/policyholders who hold variable investments (non-segregated).
- Omnia/Northstar (Bermuda) investors/policyholders with fixed and indexed investments (potentially segregated).
- Omnia/Northstar (Bermuda) creditors (also known as the General Creditor Class) without fixed, variable annuity, or indexed investments.
It is clear that it will be quite some time before any answers will be available for investors. In all likelihood, there will have to be several hearings with the various representatives who will be jockeying for positions to best protect themselves.
Sadly the investors do not get to choose which investor will be the class representative. It may also inadvertently create a situation where the representatives end up in-fighting which could only lead to discontent with the process. Given the pace, answers from the Court may not be forthcoming until the end of 2022, if that. Any hopes of early resolution and return of assets are curtailed by this Notice.
Experienced Northstar Financial (Bermuda) Investment Lawyers
Northstar Financial Services (Bermuda) products were sold by US-based broker-dealers to many foreign nationals who are now grappling with the loss of their investment.
Many of these brokerage firms such as Bankoh Investment Services and Truist Investment Services could have recommended similar US-based products that would have been less risky. Instead, the lure of high commissions seems to have compelled many of their financial advisors to turn a blind eye to the troubles brewing at Northstar Bermuda even after Greg Lindberg was indicted.
With Lindberg’s different Bermuda-based entities in liquidation, investors’ best chance of recovery is to work with knowledgeable securities attorneys. An experienced legal team can fight for you in Financial Industry Regulatory Authority (FINRA) arbitration.
Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) represents investors in recovering their Northstar Financial Service (Bermuda) and Old Mutual (Bermuda) losses from the financial firms and their registered representatives that unsuitably recommended these off-shore investments to them.
Litigation against the financial institution that recommended the Northstar entities will not impact what the investor ultimately receives, if anything, from the liquidation process.
If you sustained losses in the following Northstar Financial Services (Bermuda)’s products, contact our team of investment fraud lawyers today:
- Global Index Product
- Global Advantage Series
- Global Interest Accumulator
- Global VIP Elite
- Global Advantage Select