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Reply #17: WalMart and AIG Dead Peasants policies [View All]

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Jambalaya Donating Member (359 posts) Send PM | Profile | Ignore Thu Mar-12-09 09:32 AM
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17. WalMart and AIG Dead Peasants policies
Wal-Mart Gambled, Lost $1.3B on Dead Peasant Policies, Insurers Say
By FRANK REYNOLDS, Andrews Publications Staff Writer

Discount retailing giant Wal-Mart cannot sue its insurers just because it gambled and lost $1.3 billion on getting a tax break from thousands of insurance policies it took out on employees, according to a brief filed by the insurers in the Delaware Supreme Court.

Press reports have dubbed the corporate-owned life insurance policies at issue in this litigation dead-peasant insurance because most of the policies were purchased by companies that employ large numbers of workers at the lower end of the wage scale and most of the policy benefits went to the companies rather than to families of deceased employees.

The practice was curtailed in the mid-1990s when the federal government, which had previously called the financing scheme tax arbitrage, closed the tax loophole and began to pursue Wal-Mart for back taxes.

Meanwhile, outraged employees and their relatives sued.
After the Chancery Court dismissed the suit, Wal-Mart appealed, claiming that the lower court overlooked the duty of the insurers to deal in good faith with their client.

Wal-Marts allegations of misrepresentation fail as they concern non-actionable expressions of opinion of law or future or contingent events not representations of fact, the insurers say.

Wal-Mart Stores Inc. et al. v. AIG Life Insurance Co. et al., No. 172, answering brief filed (Del. Aug. 12, 2005).
Delaware Corporate Litigation Reporter
Volume 20, Issue 05

So, WalMart bought the policies in Delaware,instead-even collecting on policies in cases where the employee had left the employ of WalMart years earlier. WalMart was STILL the benficiary,as ALWAYS however.

As an extra added fillip, the present VP of WalMart,Eduardo Castro-Wright,was named to the BOARD of Directors of Metroplitan Life just last year.
Didn't this thread say that Met Life was looking to buy AIG? Well, that one way to get back billions lost in above lawsuit,isn't it?

And,considering that WalMart is now in the online medical records business,wouldn't that be a match made in heaven...or someplace else,perhaps?]
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