In prior posts we have documented certain similarities between the old IFDA master trust and the Wisconsin master trust, and our Illinois clients have expressed sympathy for their colleagues to the north. But, key differences exist between the two master trusts, and the recent settlement agreement offered to Wisconsin funeral homes is an indication that the WMT receiver has an appreciation for those differences, and is seeking to avoid the litigation expenses that were ultimately incurred by Illinois funeral homes.
Indecision and missteps by the Illinois Comptroller resulted in competing lawsuits by consumers and multiple groups of funeral homes. The Comptroller compounded the situation further by forcing Merrill Lynch to assume trusteeship over the key man policies it had sold to the IFDA. In contrast, the Wisconsin receiver has adopted a strategy to negotiate settlements with key parties by first forging a settlement with funeral homes. The proposed funeral home settlement is called a Pierringer Agreement, and is intended to pave the way for negotiated settlements when multiple defendants with varying degrees of fault. As reported by the Milwaukee Journal Sentinel, certain parties may want to resolve their liability exposures through a settlement, but are unwilling to so long as individual funeral homes could subsequently bring their own lawsuit.
Consequently, the receiver is seeking to gain leverage with those key parties by forcing the hand of the individual funeral home. As the reference article explains, it is a necessary strategy to breaking the settlement logjam.