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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:

1. Invoices and records relating to the total amount of expenses incurred to date in connection with any internal investigations commenced since September 27, 2011.
2. Minutes of any board or committee meetings in which possible or actual wrongdoing by anyone employed by or connected with Imperial was discussed.
3. Documents relating to the anticipated total cost of the internal investigations or their anticipated completion date.
4. Documents relating to the cost of defending the shareholder class action complaints.
5. 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 19^th 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.