A Metropolitan Mortgage & Securities insurance affiliate has filed a $220 million claim against the company, an action officials say...
SPOKANE — A Metropolitan Mortgage & Securities insurance affiliate has filed a $220 million claim against the company, an action officials say could reduce the amount of money available for bankruptcy creditors.
Western United Life Assurance, which is being operated under receivership by the Washington Insurance Commissioner’s Office, blames its massive losses and write-downs on the failed financial conglomerate.
“Why can’t they understand what they are doing is outrageous?” asked Maggie Lyons, Metropolitan’s acting chief executive officer. If Western United’s claim is upheld, Metropolitan could be forced to set aside money that would have gone to investors, Lyons said, reducing a reserve that would have paid 9 cents on the dollar to 5 cents.
“Some of these older investors are telling me that at this point, anything will help,” Lyons said. “Some of these people are desperate and that motivates me to act, to do everything I can to get as much money together as I can for them.”
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Met Mortgage filed for Chapter 11 bankruptcy protection in February. The collapse of the Spokane company, once a $2.7 billion conglomerate of insurance companies and investment services, cost more than 10,000 investors some $450 million.
Western United is the largest of three insurance subsidiaries Metropolitan operated in Washington, Idaho and Arizona.
Insurance Commissioner Mike Kreidler had no choice but to file the claim under state law, spokesman Bill Ripple said.
“I know we’ve said this before, but the commissioner has to follow state law and that means pursuing the claim which is in the best interests of the company and its annuitants,” Ripple said.
“I know people want him to be the good guy, a hero, and kiss it off,” Ripple said. “But he can’t.”
Lyons hired Chicago law firm Sidley Austin Brown & Wood as special counsel for advice about Western United’s claim.