Baldwin-United

  • Baldwin-United Corporation, a large financial services conglomerate headquartered in Cincinnati, Ohio
  • [Bonk: Contagion-?]
  • In the meantime, a movement was afoot within the life insurance industry led by Metropolitan Life Insurance Company, as well as the securities brokerage industry, to put together an enhanced rehabilitation plan which would raise the crediting rate on the SPDAs from 5.5% to at least 7.5%.
    • This effort was motivated not only by a desire to salvage the reputation of SPDAs as an investment vehicle, but also to make the SPDA holders whole and thus eliminate damage claims in the many suits filed against the brokers who sold SPDAs.
    • Forty of those cases had been consolidated in the United States District Court for the Southern District of New York, and came to be known as MDL 581, (The Honorable Charles Brieant presiding); In re Baldwin-United Corporation Litigation, 581 F. Supp. 739 (J.P.M.L. 1984).
    • Any commitment to such a plan, financial or otherwise, was initially contingent upon a resolution of the dispute between the rehabilitators and the Debtors.
    • If this could not be accomplished by early 1985, the possibility of an enhancement plan was threatening to evaporate.

1987 1016 - LC - Matter of Baldwin-United Corp, (Bankr.S.D.Ohio 1987) - United States Bankruptcy Court, S.D. Ohio, W.D.  Oct 16, 1987 - casemine.com/judgement/us/5914c194add7b049347ba6af

⇒  CITATION CODES - 79 B.R.321, DOCKET NO. - Bankruptcy No. 1-83-02495.

  • MGIC, for instance, which Baldwin bought for $1.17 billion, had $380 million in real estate and other assets which Baldwin sold to raise cash for the purchase.
    • But instead of selling only to outsiders, Baldwin has sold some of its assets, including stock of its own operating companies, to its own insurance companies.
      • ''Some of our best investments are subsidiaries that we own and manage,'' said James E. Schwab, the company's vice president and treasurer, defending the policy.
    • The problem is that when the assets are not stocks and bonds of publicly traded companies, there can be differences of opinion about how to value the assets.

1983 0123 - NYT - Baldwin United vs The Doubters - [link]

  • Governor Mario M. Cuomo today announced that the more than 1,400 New Yorkers who might have been illegally sold $30 million in "single premium deferred annuity policies" by two unlicensed and financially troubled out-of-state insurance companies will be able to recover their total investments.  
  • "Because of the companies' financial instability, New Yorkers and other purchasers stood to lose much, or at least wait for years without the expected annual return," Governor Cuomo said:
  • Superintendent Corcoran said the brokerage firms will offer any person who was solicited or sold the product of an unlicensed company in New York return of the entire premium plus interest by the firm which sold the policy.
    • The purchaser of the policy will in turn assign interest in the policy to the brokerage firm and it, rather than the individual purchaser, will take its chances in the out-of-state rehabilitation of the financially troubled companies.
    • The seven brokerage firms with which Superintendent Corcoran has met include:
      • Smith Barney Harris Upham & Co.; Shearson/ American Express; Merrill Lynch; Kidder, Peabody & Co.; E.F. Hutton; Prudential Bache; and Paine Webber.

--  1983 1010 - New York - Governor Announces Insurance Repayment Program, re Baldwin-United - (p1561-1563) 

1983 - New York - Public papers of Governor Mario M. Cuomo, Part 2 - p1225-2210 - 999p

  • Absent a settlement between the several parties, that is, the rehabilitators, the management of Baldwin-United, and the various creditors, very substantial amounts of litigation seem likely. 

--  Dick (Richard) Minck, Executive Vice-President of the American Council of Life (ACLI) Insurance and the newly elected Secretary of the Society of Actuaries

1984 - SOA - Changes in the Canadian Regulatory Framework for Life Insurance, Society of Actuaries - 36p

  • Apparently, the complexity of the organizations and their criss-crossing ownership permitted the officers of Baldwin to persuade the Federal Reserve to approve a situation in which a holding company owned both banks and other financial institutions, including insurance companies. 

--  Dick (Richard) Minck, Executive Vice-President of the American Council of Life (ACLI) Insurance and the newly elected Secretary of the Society of Actuaries

1984 - SOA - Changes in the Canadian Regulatory Framework for Life Insurance, Society of Actuaries - 36p

  • ...insolvency of National Investor's Life Insurance Company and its affiliates.
    • This situation is better known as the Baldwin-United case, because the six insurance companies which were placed into liquidation in Arkansas and Indiana were part of the complex corporate empire of Baldwin-United Corporation which was itself placed into bankruptcy.
  • Baldwin-United involved life insurance; primarily single-premium deferred annuity products.
  • IV. Summary of Baldwin-United
  • My involvement with respect to National Investors Life Insurance Company ("NILIC") and its affiliates began in the summer of 1983, at which time I was retained by the retained by the Arkansas Insurance Commissioner with respect to the examination of the companies .

--  Karl L. Rubinstein, (Special Deputy Insurance Commissioner, State of California)

1988 0914 and 0915 - GOV (House) - Insurance Company Failures - [PDF-409p-GooglePlay

  • 1983 0123 - NYT - Baldwin United vs The Doubters - [link]
  • 1983 0315 and 0316 - GOV (House) - Federal Supervision and Failure of United American Bank (Knoxville, Tenn.), Doug Barnard, Jr. (D-GA) - [PDF-661p-GooglePlay]
    • National Investors Life Insurance Co. of Little Rock, Ark., a subsidiary of Baldwin-United Corp.
    • (p569) - Appendix 5. - Press materials re: Baldwin-United
      • (p618) - 1983 0315 - WSJ - Baldwin - United Stake in Butcher Bank Linked to $13 Million Sale of Baldwin Debt, by Jim Montgomery
      • (p620) - 1983 0316 - WSJ - Baldwin-United Unit Suspends Sale of Paper - 
      • (p626) - 1983 0328 - WSJ - How Baldwin-United Expanded From Pianos to Finance to Trouble, by Paul Ingrassia and Daniel Hertzberg
      • (p630) - 1983 0405 - WSJ - Baldwin-United Misses Deadline To Repay Debt
      • (p633) - 1983 0407 - WSJ - Baldwin-United Is Said To Fail To Redeem Debt, by Paul Ingrassia
      • (p636) - 1983 0413 - WSJ - Baldwin-United Gets Further Extension to July 15 on $682 Million Debt to Banks, by Damon Darlin and Paul Ingrassia
      • (p640) - 1983 0427 - WSJ - Baldwin-United Is Sued Over Debt by Bank in Chicago
  • 1983 0714 - NYT - Six Baldwin Units Put Under States' Direction, By Michael Blumstein - [link]
  • 1983 0927 - NYT - Baldwin, A Casualty of Fast Expansion, Files for Bankruptcy - [link]
  • 1984 - SOA - Changes in the Canadian Regulatory Framework for Life Insurance, Society of Actuaries - 36p
  • 1984-2, NAIC Proceedings - Special Investigation and Consumer Information on Baldwin-United (EX) Task Force 
  • 1984 0707 - NYT - Baldwin to Sell Ambac Indemnity - [link]
  • 1984 0729 - NYT - Annuities: A New Life After Baldwin-United's Fall, by Leonard Sloane - [link]
  • 1985 - NAIC - The Baldwin-United Corporation Bankruptcy: Its Significance For Insurance Regulation - 41p
  • 1988 - JIR / NAIC - Regulatory Lessons Learned From Baldwin United Corporation - 26p
  • 1988 0914 and 0915 - GOV (House) - Insurance Company Failures, John Dingell (D-MI)   ---   [BonkNote]
  • 1989 0428 - CRS - Baldwin-United - Financial Crises of the 1970s and 1980s: Causes, Developments, And Government Responses - 41p
  • A consultant for 25 years, Tulin said he had a number of interesting assignments.
    • But two stand out in his mind.
  • The first, for M&R, was the bankruptcy of Baldwin-United Corporation Life Company.
    • Tulin was M&R’s consulting actuary to the rehabilitators of Baldwin-United’s subsidiaries, a role he held from 1983 to 1988.
    • “It was a very complex assignment that lasted five years. The endgame was perhaps the most fascinating because it involved a bidding competition between Metropolitan Life and what is now Sun America (then Sun Life). It was wrestled out in two state courts — in Indiana and Arkansas — with the resolution that the business went to Metropolitan Life.”

1997 - SOA - Own the Problem:  That’s Where to Start, says Actuary Turned Exec - [Stanley Tulin], Society of Actuaries - 3p

  • In the event of the bankruptcy of a complex company, the use of separate subsidiaries does not necessarily protect individual units or subsidiaries from the effect of financial problems elsewhere in the company-especially when public confidence in the intermediary is an essential element of each unit's viability.
    • A recent example is the impact of adverse publicity about the problems of Baldwin-United Corporation on the level of sales and redemptions of Single Premium Deferred Annuities issued by its life insurance subsidiaries. 229
    • 229 Baldwin-United is Now Facing Debenture Woe, Wall St. J., Mar. 31, 1983, at 6, col. 1; How Baldwin-United Expanded from Pianos to Finance to Trouble, Wall St. J., Mar. 28, 1983, at 1, col. 6.

1984 - LR - A New Paradigm for Financial Regulation: Getting from Here to There, by Stephen J. Friedman and Connie M. Friesen - 51p

  • 1983 0315 and 0316 - GOV (House) - Federal Supervision and Failure of United American Bank (Knoxville, Tenn.), Doug Barnard, Jr. (D-GA)
    • [PDF-661p-GooglePlay]
    • (p1-2) - Doug Barnard, Jr. (D-GA): This hearing will focus on the effectiveness of the FDIC's supervision of United American Bank, including the relationship between Federal and State banking authorities; the purchase and assumption process which resulted in UAB's sale to First Tennessee National Corp.; the performance of UAB's independent auditor Ernst and Whinney; and the sale of UAB stock in late December 1982 to National Investors Life Insurance Co. of Little Rock, Ark., a subsidiary of Baldwin-United Corp.
    • (p569) - Appendix 5. - Press materials re: Baldwin-United
      • (p618) - 1983 0315 - WSJ - Baldwin - United Stake in Butcher Bank Linked to $13 Million Sale of Baldwin Debt, by Jim Montgomery
      • (p620) - 1983 0316 - WSJ - Baldwin-United Unit Suspends Sale of Paper - 
      • (p626) - 1983 0328 - WSJ - How Baldwin-United Expanded From Pianos to Finance to Trouble, by Paul Ingrassia and Daniel Hertzberg
      • (p630) - 1983 0405 - WSJ - Baldwin-United Misses Deadline To Repay Debt
      • (p633) - 1983 0407 - WSJ - Baldwin-United Is Said To Fail To Redeem Debt, by Paul Ingrassia
      • (p636) - 1983 0413 - WSJ - Baldwin-United Gets Further Extension to July 15 on $682 Million Debt to Banks, by Damon Darlin and Paul Ingrassia
      • (p640) - 1983 0427 - WSJ - Baldwin-United Is Sued Over Debt by Bank in Chicago
1985-NP-Baldwin-United-The_Charlotte_Observer_Mon__Sep_16__1985_