Bruce Nagel, Greg Kohn, and Robert Solomon obtained a $14.2 million verdict on behalf of Joseph Nacchio, the former Qwest CEO convicted of insider trading, and his wife in Morris County on Jan. 7th.
Following a four week trial before Superior Court Judge W. Hunt Dumont, a jury found in Nacchio's favor in a suit claiming he and his wife were induced to make a faulty investment in a life insurance plan with the Ayco Company, a financial advisory firm that's now a subsidiary of Goldman Sachs.
Ayco had been working with Nacchio and his wife for almost 14 years when, in 2000, they invested about $4.5 million in an "estate enhancement plan" with the help of Ayco advisor David Weinstein. The estate enhancement plan was made up of two life insurance policies. It was Nacchio's understanding that the policies would provide about $95 million in benefits upon his death, to satisfy the inheritance tax applicable to his estate. Nacchio also understood those policies would cover him up until age 100, but in reality, they would have lapsed once he achieved the age of 72, leaving him and his wife uninsured.
The issue was discovered in 2010, and after advice from their new insurance broker who ran numerous scenarios cancelled the policies. Nacchio in 2010 spent the $4.5 million—as well as millions more, for a total of about $30 million—to purchase the sort of estate enhancement plan they wanted and thought they were getting in the first place. As for damages, the suit, filed in 2010, claimed it would have cost Nacchio about $14 million in 2000 to buy the life insurance policies he thought he was getting through Ayco.
Jurors deliberated 75 minutes before ruling Thursday in favor of the Nacchios.
Click here for the Bloomberg article.
Click here for the article in the Daily Record.
Click here for the article in Reuters.