Rothstein victims must surely believe they are being forced to own the equivalent of underwater Florida swamp land — toxically polluted to boot — in the form of the "50 million" in Gibraltar Bank insurance claims forced on them in the pending Gibraltar bankruptcy settlement. The insurance claims are virtually worthless and the Razorback settlement neatly avoided the Trojan horses inserted into the bankruptcy settlement.
The largest Trojan horse in the bankruptcy Gibraltar "settlement" is, of course, the blanket waiver protecting from lawsuits all Gibraltar related targets — the real deep pockets for Rothstein victim recovery:
Deep pocket recovery targets include: Berger Singerman honchos (and Berger Singerman itself — the bankruptcy powerhouse controlling the trustee's bankruptcy case) who partnered with Scott Rothstein to buy Gibraltar, their still unidentified Florida "movers and shakers" purchase partners — who are also possible criminal targets — , Boston Private and other sundry parties associated with the purchase and running of Gibraltar. Berger Singerman's "claims waiver" provision in the bankruptcy settlement protects them all.
The real reasons the Razorback settlement was only for 10 million:
Gibraltar Bank is a "zombie bank." It's dead ... but walking. Barely.
Razorback plaintiffs know it is worthless win jury awards of potentially up to 1/2 billion dollars (based on recent the TD Bank results) because Gibraltar will immediately fold. Gibraltar is basically a shell with no equity left after depositor claims, the FDIC steps in, and the true value of its enormous loan portfolio is disclosed. Gibraltar was in deep financial trouble (and under investigation for money laundering for which it was ultimately cited) even before Rothstein liability became clear.
That is why the Gibraltar "claims waiver" provision in the bankruptcy "settlement" is so large a Trojan horse. Only deep pocket targets — Berger Singerman honchos, their unknown Gibraltar purchase partners, Boston Private and others — can cover even part of Gibraltar's liability. But they all escape liability because of the tainted provision.
To further understand: picture a piranha (Razorback) leading a pack attacking the "deep in the water" "zombie bank" (Gibraltar). It must pick the size of its bite very carefully. It must make sure the "zombie bank" still appears to be "walking" after the bite, otherwise, it chokes and must regurgitate the chunk when the FDIC steps in.
In reality, Gibraltar Bank is "owned" by: 1) depositors (most of whom are largely uncovered by FDIC insurance because Gibraltar specializes in "wealth management"), and 2) Scott Rothstein's victims.
Gibraltar's true value is 100's of millions less than the money "due" these two groups. So Berger Singerman honchos and the other Scott Rothstein purchase partners lost their equity long ago.
Even without the 100's of millions in Rothstein victim liability, Gibraltar was is serious trouble because of chronic over reporting of bank loan asset values (a nationwide problem) and financial and loan problems, unique to Gibraltar, that have been regularly occurring as "surprises."
The hidden bankruptcy chess game — Gibraltar's stealth receivership:
In effect, Gibraltar Bank's future is being decided now through a stealth receivership, in which there are four party groups: 1) depositors (eventually represented in part by the FDIC) (creditors); 2) Rothstein victims (creditors); 3) insurers (targets); and 4) Scott Rothstein's purchase partners (include Berger Singerman honchos) and still unknown others, Boston Private and others (targets).
Berger Singerman, through control of the Rothstein bankruptcy, is using all of their considerable bankruptcy insider power and influence to assure the fourth group (including themselves) is completely removed as targets in a later receivership. The fourth group is the largest potential recovery group. The tainted bankruptcy settlement clause, baring all claims against Gibraltar related targets, accomplishes Berger Singerman's goal.
How the Razorback group avoided other Trojan Horses in the bankruptcy Gibraltar settlement:
The real value of the Gibraltar insurance claims can be seen just by looking at the principal insurance carrier defenses: Gibraltar lied in its insurance applications; Gibraltar management knew, or should have known, a massive Rothstein fraud was occurring and concealed that information in their insurance applications, which invalidated coverage.
If the carrier defenses looks familiar, they should be. They are similar to the Rothstein victims' strong claims against Gibraltar Bank.
In light of the explosive testimony recently given by Scott Rothstein, an active insurer defense exposes Gibraltar management and others to exposure of information relevant to further possible civil and/or criminal claims.
So, Gibraltar has good reason to dump their insurance claims — and the legal costs to pursue those claims — on the backs of the Rothstein victims, as specified in the tainted bankruptcy settlement. The Razorback plaintiffs did not fall into this trap. Gibraltar must pursue their own insurer claims in the Razorback settlement.
By assigning the insurance claims to the bankruptcy estate, those claims will be then controlled by Berger Singerman, who will collect legal fees from the victims (not from Gibraltar) to pursue those claims while keeping tabs on exactly what information is disclosed.
For their part, the insurers will have the silent advantage of knowing of Berger Singerman reluctance to have information harmful to them disclosed at trial and use that information to reduce even the minimal expected recovery. A cynic would predict: there will be no trial, only a sealed "settlement" after a suitable period of fee "milking" has occurred.
Equally important, the bankruptcy "settlement" means Gibraltar (and its insiders) turn the tables on the victims by forcing them to repudiate their position of Gibraltar wrongdoing. The victims must now vigorously defend Gibraltar management and bankruptcy insider shareholders — their alleged victimizers — to recover any losses from the carriers.
Rothstein victims can certainly be excused for believing that forcing them pay millions in legal fees to defend Gibraltar management and Berger Singerman honchos' Gibraltar actions — that they allege resulted in defrauding them — is adding insult to injury by, yet again, victimizing them.
The next post will tie together the issue of claims against Gibraltar insiders, show why they are primary targets for recovery and point out some unexplored areas that require further investigation.
Showing posts with label bankruptcy court. Show all posts
Showing posts with label bankruptcy court. Show all posts
Wednesday, February 29, 2012
Monday, February 27, 2012
Scott Rothstein Redux Part 3: - The Trojan Horses in the Gibraltar Bank "Settlement"
The quick foxes are amok in the chicken coop — or similar such thoughts — must be in the minds of the Rothstein victims who actually read the terms of the tainted Rothstein - Gibraltar Bank bankruptcy "settlement."
Rothstein victims have so far recovered 1/4 billion dollars from TD Bank — 67 million from a recent jury award and from a reported settlement of 170 million. There is more to come.
Recovery from Gibraltar Bank could easily be 1/2 billion dollars ... without the tainted bankruptcy "settlement," because the Rothstein victims' case against Gibraltar Bank is stronger than the case against TD Bank (see below).
Yet, the bankruptcy "settlement" only costs Gibraltar a few million dollars (see previous post) and bars Rothstein victims from any greater recovery from Gibraltar!
The "settlement" enriches the head honchos of local bankruptcy power house Berger Singerman, including Paul Singerman, by protecting their many millions invested in Gibraltar as partners (co-shareholders) with Scott Rothstein. Berger Singerman, as lead attorneys for the bankruptcy estate, for all practical purposes control the bankruptcy estate. Furthermore, public reports about the "settlement" have ignored the similar protection given to the unidentified 50.
Who or what is the 50? It isn't a movie. They are the unidentified 50 Florida "movers and shakers" who partnered with Berger Singerman honchos and Scott Rothstein to buy control of Gibraltar. Entry into that exalted inner circle implied very close personal and/or business relationships with Berger Singerman honchos and Rothstein because the investment was a private placement. The investment was made with great secrecy and a deliberate concealment of the identities of the 50. The reasons for concealing the identities of the 50 are now very clear.
The SunSentinal reported Rothstein testified: "We were involved in public corruption with law enforcement. We were involved in activities with mob-related individuals. We were involved in activities involving the physical threats of other individuals. We were involved in the public corruption side of purchasing of political positions. We were involved in the manipulation of the judiciary."
Surprisingly, reporters have made no attempt to identify the 50 ... a list that is a "brass ring" goal for investigative reporting. The list will reveals who Rothstein may have been referring to in his explosive testimony. Floridians have a right to know which officials and/or prominent individuals were in bed with Rothstein.
Moreover, as things now stand, the unidentified 50 — which likely includes public officials — owe Paul Singerman, and the other unidentified Berger Singerman honcho Gibraltar owners, a great debt (presumably to be later paid back) for protecting their Gibraltar investments and their identities.
The case against Gibraltar is stronger than the case against TD Bank:
The essence of the recently won jury case against TD Bank was straightforward. A short summary of the case was that TD Bank knew of the Scott Rothstein fraud because of the fraud's size, its longevity and normal banking controls raised many red flags that TD Bank should have reacted to; all of the signs were there for TD Bank to see a massive fraud was occurring; it is impossible to believe that TD Bank official didn't know of the fraud but allowed it to continue because it was profitable to do so. See Business Week article TD Bank Aided Rothstein Fraud, Investors’ Lawyer Tells Jury
The case against Gibraltar is stronger than that against TD Bank because Berger Singerman honchos and Paul Singerman were multi million dollar investors in Gibraltar. The victims, at trial, would argue that it is impossible for Gibraltar management and owners to not have been aware of Rothstein's schemes — more so than TD Bank — because Berger Singerman is a local bankruptcy power house firm that claims to have extensive experience in uncovering complex financial frauds. They would argue that it is impossible to believe Berger Singerman, with their extensive "expertise" in ferreting out complex financial fraud, did not see the warning signs of the massive Rothstein fraud when they conducted due diligence for their multi million dollar Gibraltar investments. In addition, the government has cited Gibraltar Bank for extensive money laundering violations. These arguments would carry great weight with a jury and it is not unreasonable to project awards of upwards of 1/2 billion dollars against Gibraltar in light of the TD Bank verdict and settlement.
See the next post for the undisclosed and extraordinary hidden "Trojan horses" that are contained in the tainted bankruptcy Rothstein - Gibraltar settlement. Those Trojan horses further benefit and protect Berger Singerman honchos ... at the further great expense of the Rothstein victims.
Rothstein victims have so far recovered 1/4 billion dollars from TD Bank — 67 million from a recent jury award and from a reported settlement of 170 million. There is more to come.
Recovery from Gibraltar Bank could easily be 1/2 billion dollars ... without the tainted bankruptcy "settlement," because the Rothstein victims' case against Gibraltar Bank is stronger than the case against TD Bank (see below).
Yet, the bankruptcy "settlement" only costs Gibraltar a few million dollars (see previous post) and bars Rothstein victims from any greater recovery from Gibraltar!
The "settlement" enriches the head honchos of local bankruptcy power house Berger Singerman, including Paul Singerman, by protecting their many millions invested in Gibraltar as partners (co-shareholders) with Scott Rothstein. Berger Singerman, as lead attorneys for the bankruptcy estate, for all practical purposes control the bankruptcy estate. Furthermore, public reports about the "settlement" have ignored the similar protection given to the unidentified 50.
Who or what is the 50? It isn't a movie. They are the unidentified 50 Florida "movers and shakers" who partnered with Berger Singerman honchos and Scott Rothstein to buy control of Gibraltar. Entry into that exalted inner circle implied very close personal and/or business relationships with Berger Singerman honchos and Rothstein because the investment was a private placement. The investment was made with great secrecy and a deliberate concealment of the identities of the 50. The reasons for concealing the identities of the 50 are now very clear.
The SunSentinal reported Rothstein testified: "We were involved in public corruption with law enforcement. We were involved in activities with mob-related individuals. We were involved in activities involving the physical threats of other individuals. We were involved in the public corruption side of purchasing of political positions. We were involved in the manipulation of the judiciary."
Surprisingly, reporters have made no attempt to identify the 50 ... a list that is a "brass ring" goal for investigative reporting. The list will reveals who Rothstein may have been referring to in his explosive testimony. Floridians have a right to know which officials and/or prominent individuals were in bed with Rothstein.
Moreover, as things now stand, the unidentified 50 — which likely includes public officials — owe Paul Singerman, and the other unidentified Berger Singerman honcho Gibraltar owners, a great debt (presumably to be later paid back) for protecting their Gibraltar investments and their identities.
The case against Gibraltar is stronger than the case against TD Bank:
The essence of the recently won jury case against TD Bank was straightforward. A short summary of the case was that TD Bank knew of the Scott Rothstein fraud because of the fraud's size, its longevity and normal banking controls raised many red flags that TD Bank should have reacted to; all of the signs were there for TD Bank to see a massive fraud was occurring; it is impossible to believe that TD Bank official didn't know of the fraud but allowed it to continue because it was profitable to do so. See Business Week article TD Bank Aided Rothstein Fraud, Investors’ Lawyer Tells Jury
The case against Gibraltar is stronger than that against TD Bank because Berger Singerman honchos and Paul Singerman were multi million dollar investors in Gibraltar. The victims, at trial, would argue that it is impossible for Gibraltar management and owners to not have been aware of Rothstein's schemes — more so than TD Bank — because Berger Singerman is a local bankruptcy power house firm that claims to have extensive experience in uncovering complex financial frauds. They would argue that it is impossible to believe Berger Singerman, with their extensive "expertise" in ferreting out complex financial fraud, did not see the warning signs of the massive Rothstein fraud when they conducted due diligence for their multi million dollar Gibraltar investments. In addition, the government has cited Gibraltar Bank for extensive money laundering violations. These arguments would carry great weight with a jury and it is not unreasonable to project awards of upwards of 1/2 billion dollars against Gibraltar in light of the TD Bank verdict and settlement.
See the next post for the undisclosed and extraordinary hidden "Trojan horses" that are contained in the tainted bankruptcy Rothstein - Gibraltar settlement. Those Trojan horses further benefit and protect Berger Singerman honchos ... at the further great expense of the Rothstein victims.
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