The dark cloud that seems to be following Imperial
Imperial Holdings (NYSE: IFT) seems to have a dark cloud hovering over its Boca Raton, FL offices. Since going public back in 2011, the company has been plagued with legal problems, shareholder turmoil and increased competition in the marketplace. In addition, their stock is currently trading at $2.87, 73% less than its 52-week high.
According to a press release by competing structured settlement factoring company RSL Funding, LLC, Texas courts have rejects Imperial Finance’s repeated attempts to stifle competition. RSL claims that Imperial sought to prohibit customers from receiving competitive bids for their structured settlement payments. The facts surrounding the case as well as the April 24th press release could not be confirmed.
In a recent amended SEC filing, Opportunity Partners is demanding to inspect and copy records in order to determine the value of their shares. Opportunity Partners also wants to determine if there is any corporate waste and assess the performance of Imperial’s officers.
According to the filing, Opportunity Partners is requesting the following:
- Invoices and records relating to the total amount of expenses incurred to date in connection with any internal investigations commenced since September 27, 2011.
- Minutes of any board or committee meetings in which possible or actual wrongdoing by anyone employed by or connected with Imperial was discussed.
- Documents relating to the anticipated total cost of the internal investigations or their anticipated completion date.
- Documents relating to the cost of defending the shareholder class action complaints.
- Documents relating to Imperial's current cash balance.
This filing came the day after, Bulldog Investors, filed a “preliminary proxy statement containing contested solicitations” to hold a special meeting to change the amount of board members, elect five new directors and make alterations to the current bylaws.
Previously, Bulldog Investors demanded the resignation of two independent directors from Imperial’s board. Imperial announced on March 19th that they could not file their annual report due to their inability to value their assets because of the FBI raid in September. The raid was due to an investigation by the U.S. Attorney’s Office for the District of New Hampshire. As a result of the raid, shareholders filed class action securities fraud lawsuits against them.
Imperial Holdings signed a severance agreement with CFO and Chief Credit Officer Richard O’Connell Jr. on February 15, 2012. O’Connell will receive his base salary for 24 months and additional bonuses. The company announced that they are a target of a SEC investigation in connection with the company’s premium finance business.
In January, Jonathan Neuman took a leave of absence from his duties as COO and President.
Imperial Holdings had previously announced that the investigation was into its life settlement business not its structured settlement business. Imperial has denied any wrongdoings and no other company officials besides Neuman are being targeted in the probe.
SEC Investigating Imperial Holdings for possible violations of federal securities laws
The Securities and Exchange Commission (SEC) subpoenaed Imperial Holdings Inc. (NYSE: IFT) last week, according to The Wall Street Journal. The subpoena requested information regarding the company’s premium finance business.
According to the Imperial Premium Finance website, a premium finance transaction is when a life insurance policyholder obtains a loan against through an irrevocable life insurance trust established by the insured, to pay insurance premiums for a fixed period of time.
The SEC is requesting documents from 2007-present to investigate whether the company violated federal securities laws. Imperial went public in 2011 and on February 13, 2012 it was reported by numerous sources that the company lost 2 major investors.
Imperial Holdings signed a severance agreement with CFO and Chief Credit Officer Richard O’Connell Jr. on February 15, 2012. O’Connell will receive his base salary for 24 months and additional bonuses. Last month, Jonathan Neuman took a leave of absence from his duties as COO and President.
The company’s office was raided by the FBI in September 2011 due to an investigation by the U.S. Attorney’s Office for the District of New Hampshire. As a result of the raid, shareholders filed class action securities fraud lawsuits against them.
Previously, Imperial Holdings announced that the investigation was into its life settlement business not its structured settlement business. Imperial has denied any wrongdoings and no other company officials besides Neuman are being targeted in the probe.
More bad news for Imperial Holdings as two major investors bail
Boca Raton, FL based Imperial Holdings (NY:IFT) got more bad news on Friday when 2 major investors sold their entire stakes in the company, according to the South Florida Business Journal.
The company’s office was raided by the FBI in September due to an investigation by the U.S. Attorney’s Office for the District of New Hampshire. As a result of the raid, shareholders filed class action securities fraud lawsuits against them.
Previously, Imperial Holdings announced that the investigation was into its life settlement business not its structured settlement business. Imperial has denied any wrongdoings and no other company officials besides Jonathan Neuman are being targeted in the probe.
Last month, Neuman took a leave of absence from his duties as COO and President.
Pine Trading reported a U.S. Securities and Exchange Commission filing on Friday that it no longer owns the 2.2 million shares of Imperial stock which represented approximately 9.5% of the company.
In another SEC filing on Friday, a three-way offshore partnership between Bahamas-based Chase Ridge Ltd., a British citizen residing in the Bahamas; and a branch office of Skarbonka Sp. in Luxembourg, sold all of 1.27 million shares in Imperial Holdings.
While other major investors haven’t jumped ship just yet, Imperial Holdings stock remains around $2.50/share up from a low of $1.55 on Sept. 28, 2011, the day after raid. The stock has not traded in the double digits since a few months prior to the raid.
Imperial Holdings executive takes a leave of absence
President and COO of Imperial Holdings, Jonathan Neuman, will take a 4 month leave of absence starting January 27, 2012, a company spokesperson said.
The Boca Raton based company had their offices raided in September by Federal authorities due to an investigation by the US Attorney’s office in New Hampshire. The South Florida Business Journal has also reported that Neuman was the only company official targeted by Federal investigators.
Previously, Imperial Holdings announced that the investigation was into its life settlement business not its structured settlement business. Imperial has denied any wrongdoings and no other company officials are being targeted in the probe.
Numerous shareholder class action securities fraud lawsuits have been filed against the company and their shares closed at $2.37. Antony Mitchell, CEO and Chairman of the Board will resume Neuman’s duties.
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