3 Groups OK Executive Life Sweetener : Courts: But another holds out against a French combine’s plan to rescue the failed Los Angeles insurer.

Much of the remaining opposition to the rehabilitation plan for Executive Life Insurance Co. melted away Wednesday, as three groups of policyholders accepted a sweetened settlement deal from the French investment group that intends to take over the failed Los Angeles insurer.

Two of the settlements were reached quietly in private--the third amid public acrimony--on the first day of a Los Angeles Superior Court hearing on the fate of Executive Life. The firm was seized by state Insurance Commissioner John Garamendi in April, 1991, in the nation’s largest insurance insolvency.

Wednesday’s deals left only one opponent to the rehabilitation plan: the trustees for $1.65 billion worth of municipal bonds backed by Executive Life guaranteed investment contracts. These so-called muni-GIC holders are also asking the court to rescind a $3.25-billion sale of Executive Life junk bonds to the French group, arguing that the sale was rigged to give the buyers a huge windfall.

In court Wednesday, the Action Network for Victims of Executive Life, which represents about 1,500 individual policyholders, agreed under heavy pressure to drop its opposition.

The pressure was a take-it-or-leave-it offer--expiring at 5 p.m. Friday--that would give ANVEL members a share of up to $66 million. The money would add about 1.4% to the amount most policyholders would recover in the rehabilitation, beyond the amount covered by state insurance guarantee funds.

ANVEL lawyer David M. Balabanian argued that the group should be allowed to explain its objections to the plan without jeopardizing its members’ chances for a share of the sweetener. Judge Kurt J. Lewin agreed, granting Balabanian two days to present testimony as a friend of the court.

But that enraged representatives of the French group. Their lawyer, Kenneth Heitz, in effect said: You can either join us or fight us, but you can’t do both. He abruptly withdrew the settlement offer.

That was enough for ANVEL, which quickly dropped its opposition. Heitz relented and renewed the offer.

Also settling on Wednesday were representatives of holders and issuers of two classes of investments backed by Executive Life GICs. One group includes the cities of Simi Valley, Temecula and Whittier and other issuers of $37 million in municipal bonds. The other group represents $160 million of pension funds backed by GICs.

Beginning Monday, Garamendi’s lawyers will present a detailed description of the rehabilitation plan, which has been revised to correct faults that led an appeals court to reject it earlier this year.