Exec Life Jurors Reach Verdicts
Jurors in the lawsuit filed by the state against French billionaire Francois Pinault over the sale of insolvent insurer Executive Life Insurance Co. said Monday that they had reached verdicts on all but one of the questions in the case, but the verdicts weren’t made public.
The jurors, who reached verdicts on seven of the eight questions they had been asked to decide, will be back in federal court today to debate the final question.
The panel, now it its fourth week of deliberations after an eight-week trial, asked U.S. District Judge A. Howard Matz for direction on the final question.
Matz told the nine-member jury to be back today and sent them a note asking whether there was anything he could do, such as providing additional instructions or transcripts of testimony. Matz also asked the jury whether they were “hopelessly deadlocked” on the final count.
A spokesman for Garamendi on Monday said lawyers were “patiently waiting” for a verdict. James Clark, an attorney for Pinault, could not be reached.
If the jury doesn’t reach an agreement on the final question today, it may not resume deliberations until May 16 because of one juror’s request for time off.
The state’s suit alleges that banking giant Credit Lyonnais, owned then by the French government, used a series of front companies to acquire the junk bond portfolio and the insurance assets of Executive Life, which were later sold at a big profit.
State law prohibits foreign banks from owning insurance firms licensed to do business in California.
The suit alleges that Insurance Commissioner John Garamendi, during his 1991-94 term in office, was defrauded by Credit Lyonnais and other French companies. Specifically, the state’s suit alleges that Pinault’s Artemis holding company was created as part of a scheme to help Credit Lyonnais unload the insurer’s assets.
Pinault’s lawyers have denied any fraud and said Garamendi knew the details of the sale of Executive Life.
The state is seeking about $1 billion in damages and interest from Artemis and Pinault, the fourth-richest person in France, according to Forbes magazine.
In another development Monday, state Sen. Jackie Speier (D-Hillsborough) said a legislative audit committee had agreed to hear her request on Wednesday for an audit in the Department of Insurance’s handling of the case, prompted by criticisms that the state settled for too little with some of the investment firms in the case.
