BOCA RATON, Fl—Specialty finance firm, Imperial Holdings, Inc.(NYSE: IFT) announced today that Opportunity Partners, L.P., a shareholder currently suing them to compel an annual meeting of shareholders has delivered a demand to hold a special meeting of shareholders on behalf of shareholders.
As previously reported, Imperial postponed its annual meeting of shareholders scheduled on May 17, 2012 because of the company was unable to file an annual report with the Securities and Exchange Commission due to their inability to value their assets associated with 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 into the company’s life settlement business. The company recently announced a settlement with authorities regarding this matter. The investigation was not into the company’s structured settlement purchasing transactions.
Imperial is working diligently to file its annual report and plans to set a new annual meeting date as soon as possible but could not guarantee that the meeting would take place before the August 20, 2012 deadline.
As part of the settlement, former President and COO, Jonathan Neuman stepped down from the Imperial’s board of directors and is no longer an employee.
BOCA RATON, Fla.-- Imperial Holdings, Inc. (NYSE: IFT) announced today that they entered into a Non-Prosecution Agreement with the U.S. Attorney’s Office for the District of New Hampshire (“USAO”) relating to investigation into Imperial’s premium finance business.
Under the terms of the agreement the USAO has agreed not to prosecute Imperial for any crimes in regards to the misrepresentations on life insurance applications. In addition, they agreed not to prosecute Imperial for any potential securities fraud claims related to its premium finance business.
According to the company’s press release,” Imperial acknowledged that, in connection with a portion of its retail operation that began in December 2006 and was discontinued in January 2009, in certain circumstances where Imperial employees were also licensed life insurance agents who wrote the underlying insurance policies, the Company facilitated and/or made misrepresentations regarding premium financing on life insurance applications for elderly individuals and failed to take appropriate precautions to prevent other misrepresentations that may have been made on life insurance applications by employees, prospective insureds and external agents and brokers. “
As a result Imperial of the agreement Imperial will pay a penalty of $8 million. The agreement does not resolve the investigation of the company by the Securities and Exchange Commission. In addition, the shareholder lawsuits stemming from when the stock plunge after the FBI raid still continue.
Imperial also announced today that it has terminated the employment of President and COO, Jonathan Neuman. Mr. Neuman had been on a leave of absence from his position since January 30, 2012 has stepped down from the Imperial’s board of directors and is no longer an employee.
Imperial’s stock rose 32% today after the announcement. Chairman and Chief Executive Anthony Mitchell stated that the company plans to focus strictly on traditional life settlements and structured settlements.
Did you know that 9-10 lottery winners are broke within 5 years? It’s not surprising since most people are ill-equipped to handle the windfall of instant money. While structured settlement annuitants and lottery winners who opt for the annuity have better protection against unwise spending, bad investments, con-men and trustee mismanagement there are some safe guards that should be taken if you ever come into money.
Former dot-com millionaires, financial gurus and lottery experts have a great amount of advice on how to preserve your money including:
- Shhh, don’t say a word: Don’t update your Facebook status and call everyone you know telling them the good news. There was one case of a gentleman who bragged about receiving a legal settlement only to have his house robbed. You will have enough strangers, long lost family members and charities coming out of the woodwork soon enough so try to keep it a secret.
- Don’t change your lifestyle: One expert suggest that you do not change anything about your lifestyle for 1 year. I know that seems really tough to do especially if you’re living on your buddy’s couch but let the money sink in and don’t make foolish purchases.
- Get help: Hire a lawyer, accountant/tax expert and financial planner to help you make decisions regarding the money. Make sure you get a least 3 names and they are a member of the following organizations--National Association of Personal Financial Advisors, the Financial Planning Association, and the Certified Financial Planner Board of Standards. The American Institute of Certified Public Accountants has a list of CPAs who've earned the Personal Financial Specialist designation. The Securities and Exchange Commission (SEC) also has an area on their site to check financial firms and planners.
- Tax time: Depending on where you live, where you got the money from (lottery versus lawsuit) and how you’re receiving the payments there will be host of tax issues to consider. Get with a tax expert to discuss all of the implications before you do anything with the money. Don’t be like those few “celebrities” that didn’t pay their taxes and ended up in jail.
- No friends: Don’t lend money to old friends and don’t make new friends. Stay away from people in general because they will want to borrow from you or have an investment for you. Many times these new friends are scammers.
- No investing: Sit on your money and do not make any investments like buying artwork, businesses or stocks. Again see rule number 2.
- The 2% rule: If you can’t resist a major deal do not put more than 2% of your money into it. This way if this great deal doesn’t pan out you’re preserving your wealth.
- Watch your spending: If and when you make a few purchases keep it reasonable. Don’t buy a million dollar mansion or brand new cars for the entire family. Know where all your money goes, any fees associated with your purchases and other costs.
- Protect your identity: If it is possible protect your identity. Change your phone number, avoid appearing in articles and don’t make public donations. If you can, form a trust instead of using your name and always keep a watchful eye on your credit report.
- Stay healthy: Stress can kill you and no matter how much money you have it means nothing if you don’t have your health.
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.