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Emergent and White Eagle blame LNV for bankruptcy filing in lawsuit
By Caroline Salls
Pittsburgh, Jan. 25 – Emergent Capital, Inc. and debtor-plaintiffs White Eagle Asset Portfolio, LP, Lamington Road DAC and White Eagle General Partner, LLC filed a lawsuit Friday that claims that LNV Corp., Silver Point Capital LP and GWG Holdings, Inc. schemed “to coerce plaintiffs into selling their valuable portfolio of life insurance policies to defendants for well below its true value.”
According to the complaint filed with the U.S. Bankruptcy Court for the District of Delaware, White Eagle, which is a joint venture between Emergent and LNV, owns a portfolio of nearly 600 life insurance policies, with a total face value of nearly $3 billion and a present value of more than $500 million.
White Eagle said LNV agreed to lend it $370 million in exchange for a 45% stake in White Eagle.
“That equity stake, and LNV’s significant control over White Eagle under the loan agreement, creates a joint venture, and gives rise to fiduciary duties to White Eagle and Emergent, on the part of LNV,” the lawsuit said.
“In direct violation of those fiduciary duties, LNV induced White Eagle to enter into an onerous and unconscionable amended loan agreement in December 2016 and January 2017, and has been engaged in a concerted campaign to ‘squeeze’ White Eagle and Emergent by improperly restricting their cash flow, in the hopes that White Eagle and Emergent will have no choice but to sell the valuable policy portfolio to LNV or one of its proxies at below its true value.”
White Eagle and Emergent said in the complaint that the defendants’ alleged misconducted drove it and the other debtor-plaintiffs into bankruptcy.
Emergent is a Boca Raton, Fla., specialty finance company that invests in life settlements. White Eagle filed bankruptcy on Dec. 13. The Chapter 11 case is being administered under case number 18-12808.
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