In an opinion issued last week, the Eighth Circuit Court of Appeals struck down key NPS trial rulings that resulted in a $491 million jury verdict against PNC Bank (as the successor to Allegiant Bank). The appeals opinion states that the trial court erred when it allowed the NPS receiver to argue tort based claims
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A Cassity Update: Doug’s Request for a Compassionate Release
By Bill Stalter on
Posted in NPS/Lincoln, Uncategorized
Prison life has been hard on Doug Cassity. The de facto executive officer of National Prearranged Services was sentenced to 10 years in Federal prison for his role in the preneed fraud that involved hundreds of millions of consumer funds. With about 6 years remaining on his sentence, Mr. Cassity has requested a release from…
Missouri HB 1062: A Super Trust for the NPS Recovery
By Bill Stalter on
Posted in Legislation, NPS/Lincoln
It has been almost 2 years to the date when a $391 million dollar judgment was entered against PNC Bank, as the successor to Allegiant Bank. Allegiant Bank was one of the last trustees to administer National Prearranged Services’ preneed trusts in Missouri. PNC Bank appealed that judgment, and a decision is expected any day…
The Missouri Fund Manager: What was Grandfathered?
By Bill Stalter on
There seems to be some confusion in Missouri over the permissible contractual relationships among the preneed seller, the preneed trustee and the independent investment advisor. Prior to the collapse of NPS, and the subsequent amendment of Missouri’s preneed law, Chapter 436 allowed the preneed seller to incorporate provisions in its preneed trust agreement to instruct…
The High Cost of Litigation: Copy Charges
By Bill Stalter on
Posted in NPS/Lincoln
The Special Deputy Receiver for National Prearranged Services recently filed a Bill of Costs with the Federal trial court. The Bill of Costs seeks to recover copy charges of more than $500,000 from a former NPS trustee. Those costs do not include attorneys’ fees. Litigation can be very costly.
Missouri’s preneed regulators are keenly aware…
Trustee Investment Liability: The Preneed Purchaser Wild Card
By Bill Stalter on
Back in March, the NPS Special Deputy Receiver won a judgement of $355 million against PNC Bank (as successor to Allegiant Bank). In defense of Allegiant Bank, PNC argued that Missouri’s Chapter 436 defined the trustee’s duties as owed solely to the preneed seller. That was the intent of the Missouri Funeral Directors Association when…
NPS Trustees: Standard of Care for Investments
By Bill Stalter on
Now that a judgment has been rendered against Allegiant Bank, the NPS litigation will move on to the appeal stage where the focus will be on R.S.Mo. Section 436.031. The NPS trustees universally argued that this provision of the Missouri preneed statute relieved them of all responsibility and liability for investment supervision. As set out…
NPS Trustees: Standard of Care for Preneed Administration
By Bill Stalter on
Final arguments were heard in the NPS civil trial this past Friday. With the SDR having presented evidence through the prior Friday, the defendant trustees presented their case in less than a week. This may reflect that the NPS trustees had viewed their duties as having been defined by Chapter 436 as relatively low. As…
NPS Trustees: Pre-acceptance Due Diligence
By Bill Stalter on
The Office of the Comptroller of the Currency (the OCC) supervises the fiduciary activities of national chartered banks, and in February, updated the guidelines used by its examiners. The “Personal Fiduciary Activities” booklet includes a section on pre-acceptance due diligence that fiduciaries should conduct before agreeing to serve as trustee for an account. …
Finding Fault with Chapter 436: The NPS Civil Trial
By Bill Stalter on
The NPS civil trial has completed its third week, and jurors probably face another four weeks of witness testimony. First from the NPS receiver, and then from the defendant trustees, the jurors are hearing two very contrasting theories of what fiduciary duties were owed by the NPS trustees. Up until a few weeks before the…