UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF NEW YORK 

--------------------------------------------------------------------x 

RITCHIE CAPITAL MANAGEMENT, L.L.C., et al., 

 

 Plaintiffs, 

 v. 07 Civ. 3494 (DLC) 

 

COVENTRY FIRST LLC, et al., 

 

 Defendants. 

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DECLARATION OF DANIEL R. WALFISH 

IN SUPPORT OF PLAINTIFFS’ OPPOSITION 

TO DEFENDANTS’ MOTION TO DISMISS 

COUNTS I AND II OF THE PROPOSED SECOND AMENDED COMPLAINT 

I, Daniel R. Walfish, hereby declare: 

1. I am associated with the law firm of Robbins, Russell, Englert, Orseck, Untereiner & 

Sauber LLP, counsel to the plaintiffs in this action. I make this declaration on personal knowledge. 

 2. Attached hereto as Exhibit A is a true and correct copy of a memorandum decision 

issued by Justice Helen E. Freedman on September 25, 2007 in People v. Coventry First LLC, et al., 

index number 404620/06, in the Supreme Court of New York, County of New York. 

 3. Attached hereto as Exhibit B is a true and correct copy of a press release available on 

Defendants’ web site, in which Defendants represent that they have paid $175 million to New York 

consumers for their life insurance policies. 

I declare under penalty of perjury that the foregoing is true and correct. 

Executed in Washington, D.C. on October 19, 2007 

 

 

 /s Daniel R. Walfish 

 Daniel R. Walfish 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 1 of 18
Exhibit A 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 2 of 18
SUPREWIE COURT OF THE STATE OF NEW YORK - NEW YORK COUNTY 

PRESENT: 

Justice 

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MOTION DATE 

MOTION SEQ. NO. I 

MOTION CAL. NO. 

The following papers, numbered 1 to were read on this motion tolfor 

I PAPERS NUMBERED 

I 

Notice of Motion1 Order to Show Cause - Affidavits - Exhibits ... I 

Answering Affidavits - Exhibits 

I 

I 

I 

Replying Affidavits i 

Cross-Motion: G Yes G No 

Upon the foregoing papers, it is ordered that tfiS motion 9 wC~S - 7, l\c~v conso\. A&- FM. '\Oivi+ d\5\105 ~bn UI QC~~C* 

Dated: 

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2 3 Dated: 

L 7 / J. S. C. 

Check one: FINAL DISPOSITION ~NON-FINAL DISPOSITION 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 3 of 18
SUPREME COURT OF THE STATE OF NEW YORK 

COUNTY OF NEW YORK x 

THE PEOPLE OF THE STATE OF NEW YORK 

by ELIOT SPITZER, Attorney General of 

The State of New York, 

Index No. 404620106 

Plaintiff, 

COVENTRY FIRST LLC, MONTGOMERY 

CAPITAL, INC., THE COVENTRY GROUP, INC., 

and RED S. BLERGER, 

Defendants. x 

Helen E. Freedman, J.: 

i 

The motions with sequence numbers 002 and 003 are consolidated for joint disposition. 

Introduction -- This lawsuit concerns the "life settlements" industry, in which owners of 

variable life insurance policies sell them to third parties for immediate cash. The purchasers 

then "securitize" the policies by selling them in groups to third-party investors, who pay the 

premiums as they come due and eventually receive the proceeds of the policies when the insureds 

die. The Attorney General of the State of New York brought this action on behalf of the people 

of the State of New York (the "State"or "plaintiff') against defendant Coventry First LLC 

("Coventry First"), which purchases life insurance policies from individuals throughout the 

country for resale to investors. Along with Coventry First, the State sues Coventry First's 

Executive Vice President, defendant Reid Buerger, Coventry First's parent corporation, 

defendant Montgomery Capital, hc. ("Montgomery Capital"), and a Coventry First affiliate, 

defendant The Coventry Group, hc. ("Coventry Group"). 

Page 1 of 12 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 4 of 18
The complaint alleges that defendants, in concert with brokers acting as intermediaries, 

uses bid-rigging and other anti-competitive schemes to deprive policy holders of a fair 

marketplace in which to sell. In addition, the State alleges defendants and the brokers 

deliberately mislead sellers into believing that buyers are competing freely for their life 

settlements and that as a result sellers are receiving the best possible prices. Suing as parens 

patriae, the State asserts statutory claims against all defendants for fraudulent business practices 

under Executive Law 63(12) (the "Executive Law"), for anti-competitive behavior under 

General Business Law 5 340 et seq. (the "Donnelly Act"), and for securities violations under 

General Business Law § 352 et seq. (the "Martin Act"). Plaintiff also asserts common law 

claims for fraud, unjust enrichment, and inducing the brokers to breach their alleged fiduciary 

duty to policy sellers. The relief sought by the State includes an order (1) restraining defendants 

from hrther misconduct, (2) directing them to disgorge all gains and pay restitution and 

damages, (3) granting rescission rights to all parties who sold policies to Coventry First from 

2001 to the present, and (4) awarding punitive damages, treble damages and plaintiffs costs and 

attorney's fees. 

Claims - The State alleges the following in the complaint: Coventry First, a Delaware 

corporation headquartered in Pennsylvania, competes nationwide with other businesses to 

purchase life settlements through an auction-style bidding process. Sellers ofien employ the 

services of one or more brokers who specialize in marketing life settlements; according to the 

State, these brokers are fiduciaries of the sellers and act their agents to obtain the best prices for 

them. 

The complaint alleges that Coventry First engages in two basic schemes that Buerger 

Page 2 of 12 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 5 of 18
oversees and directs. First, they allegedly rig the bidding process by secretly paying brokers to 

refrain from soliciting bids from Coventry First's competitors and refrain from relaying 

competing bids to the sellers. Also, until 2005, Coventry First allegedly paid brokers to provide 

it with the "right of last bid" on life settlements and to refrain from seeking better bids from other 

buyers. 

To illustrate the alleged bid-rigging scheme, the complaint sets out nine transactions in 

detail. These transactions will be referred to as the "Bid-rigging Examples." As discussed 

further below, only two of the nine Bid-rigging Examples involved sellers or brokers who reside 

in New York. 

The State alleges a second scheme in which Coventry First motivates brokers to act 

against the sellers' interests by submitting "gross offers" directly to the brokers. These offers are 

lump sum payments, from which the brokers draw their compensation before passing the 

remainder on to the sellers as the life settlement purchase prices. According to the State, 

although the brokers solicit gross offers, the brokers and Coventry First usually only disclose the 

net purchase prices to the sellers, and do not reveal the gross offer amounts and the amounts the 

brokers keep for themselves. This gross payment system allegedly motivates brokers to profit at 

the sellers' expense, and also encourages them "to advise their clients to sell their life insurance 

policies when, in fact, such sales may be against the client's financial interests." To further this 

scheme, plaintiff alleges, Coventry First refuses to disclose a broker's compensation to the seller 

unless required under state law, and has at times provided sellers with false documents indicating 

that their brokers received less than their actual compensation. Plaintiff outlines about five 

additional transactions involving gross offers to demonstrate how Coventry First employs them. 

Page 3 of 12 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 6 of 18
Motions - In separate motions, Coventry First and Buerger (the "Movants") apply for 

orders (1) dismissing the complaint for failure to state a claim and (2) compelling the State to 

Tr 

arbitrate certain claims and staying this action pending arbitration.' In t&i&ht motion (# 003), 

the Movants seek dismissal on the grounds that (1) the State lacks the authority to pursue most if 

not all of the claims because the alleged wrongdoing and injuries lack a sufficient connection to 

New York, (2) plaintiff bases its claims on a purported duty to disclose brokers' compensation 

that does not exist under New York law, (3) plaintiff fails to make out a common law fraud claim 

because it does not allege that the policy sellers suffered any out-of-pocket injury, (4) none of 

the parties to the transactions had any fiduciary obligations to the sellers, and (5) and plaintiff 

fails to state any claim under the Donnelly and Martin Acts or for equitable relief. 

-.r, D(S&.- /'- ? 

In -motion (# 0021, the Movants seek an order compelling the State to arbitrate 

any claims connected with policy sellers who had executed sales agreements with Coventry First 

that required the parties to resolve their disputes through arbitration. 

Extent of the State's authority - In seeking dismissal, the Movants first point out that they 

are not New York residents and that, in the case of seven of the nine Bid-rigging Examples, (1) 

the policy sellers and brokers reside outside New York and (2) none of the alleged wrongdoing or 

injuries occurred in New York. The exceptions include one Bid-rigging Example in which both 

the policy seller and his broker, AllSettled, reside in New York, and another in which 

AllSettled's misconduct in New York allegedly injured a seller that resides outside New York. 

The other seven transactions lack any direct connection with New York. 

1 In a separate motion, Montgomery Capital and Coventry Group move for an order 

dismissing the complaint as against them. 

Page 4 of 12 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 7 of 18
The parens patraie doctrine enables the State to seek damages, restitution and civil 

penalties on behalf of New York residents that are harmed by wrongful acts occumng within and 

outside this State, see People v. Concert Connection, Ltd., 2 1 1 A.D.2d 3 10,3 15- 16 (2d 

Dept. 1999, and on behalf of non-residents of the State that have been harmed by wrongful acts 

in New York, see People ex rel. Spitzer v. Telehublink Corp., 301 A.D.2d 1006, 1009-10 (3d 

Dept. 2003). However, the State's authority under the Executive Law does not extend to 

redressing injury to out-of-state residents that resulted from wrongdoing outside New York, 

because the citizens of New York lack any direct interest in the matter. See Exec. Law $ 63(1) 

(authorizing the Attorney General to "[plrosecute . . . all actions in which the state is interested.") 

Likewise, the State's authority to sue under the Martin Act is limited since the statute only 

regulates securities transactions occurring "within or from" New York. GBL $ 352(1); see also 

Lehman Bros. Comm. Corp. v. Minmetals Intl. Non-Ferrous Metals Trading Co., 179 F.Supp.2d 

159, 164 (S.D.N.Y. 2001). The Donnelly Act applies to restraints on business "in this state." 

GBL $ 340; cf Goshen v. Mut. Llfe Ins. Co., 98 N.Y.2d 3 14, 326 (2002) (holding that 

GBL $ 349(h), which also applies to conduct "in this state," precludes recovery for out-of-state 

injury.) Finally, the State lacks authority to prosecute the common law claims insofar as they are 

based only upon claims of wrongdoing outside New York by out-of-state residents. 

In opposition, plaintiff submits an affidavit stating that 298 of 3,469 life settlement 

purchases by Coventry First between 2001 and March 2006 involved New York sellers. Plaintiff 

also asserts in his opposition brief that "many of the [the challenged transactions] were 

effectuated" through AllSettled, the New York broker. This additional submission further 

demonstrates that, insofar as New York sellers or brokers or misconduct in New York is 

Page 5 of 12 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 8 of 18
involved, the State has stated sufficient grounds to sue on behalf of citizens. However, the 

claims are partially dismissed insofar as they pertain to life settlement transactions that have no 

identified connection with New York brokers, New York sellers, or alleged misconduct in New 

York. 

Duty to disclose - The Movants next contend that all of the State's claims fail because 

they are "premised entirely" on defendants' breach of a purported obligation to disclose to the 

sellers the details of the brokers' compensation. However, defendants argue, New York law 

does not affirmatively require life settlement buyers to disclose what they paid the sellers' 

brokers as compensation. 

Defendants mis-characterize the thrust of the State's allegations. Plaintiff acknowledges 

that defendants had no statutory duty to disclose the broker payments, but contend that 

defendants' failure to disclose is merely one element of their alleged pattern of actionable 

misconduct. That pattern gives rise to plaintiffs' central claims for "fraudulent business 

practices" under the Executive Law. The thrust of the first alleged scheme is that 

Coventry creates the appearance of a legitimate auction for life settlements when, 

in fact, it pays hidden co-broker payments for purposes of fixing the bids. 

Nondisclosure of co-broker fees may be part of Coventry's scheme to defraud, but 

the claim is not for breach of an affirmative duty to disclose. 

These allegations state a claim of "fraud" under the Executive Law, which uses the term very 

broadly "and includes acts which may be characterized as dishonest and misleading." St. v. Solil 

Mgt. Corp., 128 Misc.2d 767, 772 (Sup. Ct. N.Y. Co.), aff'd, 114 A.D.2d 1057 (1st Dept. 1985); 

see also People v . The Concert Connection, Ltd., 21 1 A.D.2d 3 10 at 320; St. v. Feldman, 2 10 

F.Supp.2d 294, 299-301 (S.D.N.Y. 2002)(allegation that defendants rigged bidding at public 

Page 6 of 12 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 9 of 18
stamp auctions made out claim under Executive Law) . Under the circumstances that the 

complaint sets forth, defendants' non-disclosure could be deemed as dishonest and misleading 

practice even if no statute or regulation requires disclosure. 

According to the State, non-disclosure also plays a key role in theUgross offer" payment 

scheme . Since the sellers never learn the how much brokers receive from defendants' gross 

offers, the State alleges that defendants conceal how the payment scheme benefits defendants and 

the brokers at sellers' expense. 

DonneIIy Act - Defendants argues that the State does not state a claim under the Donnelly 

Act claim because it fails to adequately allege how defendants' bid-rigging caused "antitrust 

injury" under the statute by "foreclos[ing] all meaningful opportunities" for policy holders to sell 

to Coventry First's competitors. However, the State does not need to allege "antitrust injury" in 

detail to state a Donnelly Act claim, because defendants' alleged scheme to use bid rigging to 

stifle competition in the life settlement market constitutes a "per se" violation of the Donnelly 

Act. See, e.g., People v. Schwartz, 160 A.D.2d 964, 965 (2d Dept. 1990); Schlottman Agency, 

Inc. v. Aetna Cas. & Sur. Co., 70 A.D.2d 1041, 1041 (4th Dept. 1979). 

Martin Act - The Movants correctly point out that the Martin Act claim fails because the 

variable annuity and life insurance policies that are sold in the life settlement market do not 

constitute "securities" under the statute. Although variable life insurance policies are considered 

"securities" under certain federal laws, see, e.g., S.E.C. v. Variable Annuity Life Ins. Co., 359 

U.S. 65, 7 1-73 (1 959)(holding that variable annuities were regulated by the Securities and 

Exchange Commission), those policies are characterized as insurance products under New York 

law and comprehensively regulated by the Insurance Law and regulations. See Meagher v. 

Page 7 of 12 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 10 of 18
Metro. Llfe Ins. Co., 1 19 Misc.2d 6 15,6 18 (Sup. Ct. N.Y. Co. 1983). Accordingly, the Martin 

Act claim is dismissed. 

Common-law fraud claim -- Plaintiff fails to state a fraud claim because the alleged injury 

to the policy sellers is too speculative. In essence, plaintiff contends that the policy sellers might 

have received better prices for their policies if the Movants had not rigged the bidding process. 

However, "[wlithout proof of an out-of-pocket loss, plaintiff cannot recover in [common law] 

fraud." Sardanis v. Sumitomo Corp., 279 A.D.2d 225,229 (1st Dept. 2001). 

Plaintiff effectively concedes that the "out-of-pocket" rule bars most of the common law 

fraud claims, but argues for an exception in the case of one transaction in which Coventry First 

allegedly misrepresented to a seller in writing that a broker had received $ 10,000 less from a 

gross offer than he actually did. In effect, plaintiff argues that if the seller knew how much the 

broker was being paid, he might have been able to negotiate a higher price for himself. Again, 

this claimed loss is too speculative to support any recovery for fraud. It bears emphasis, 

however, that failure to show out-of-pocket losses has no bearing on whether a claim is stated for 

fraudulent business practices under the Executive Law, since the term "fraud" is used far more 

broadly in the statute than in the common law. 

Fiduciary claims - The Movants next contend that the State does not make out a claim 

for aiding and abetting brokers in breaching their fiduciary duties to sellers, because life 

settlement brokers owe no fiduciary duty to their clients. Instead, the Movants argue, brokers 

and sellers have an arms-length business relationship. 

The question of whether a life settlement broker is the fiduciary of the selling client is 

apparently an issue of first impression in this jurisdiction. However, the well-settled principles 

Page 8 of 12 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 11 of 18
governing broker-principal relationshps lead to the conclusion that life settlement brokers serve 

as fiduciaries of their clients. Under New York law, a "broker" is, among other things, an agent 

who for compensation negotiates on behalf of the principal to sell the principal's property while 

acting as the intermediary between the principal and third-party buyers. See BAII Banking Corp. 

v. UPG, Inc., 985 F.2d 685, 700 (2d Cir. 1993) (construing New York law). In general, agency 

law governs the rights and obligations between the broker and the principal, See UWC , Inc. v. 

Eagle Indus., Inc., 213 A.D.2d 1009, 1010 (4th Dept. 1995). As the principal's agent, the broker 

is the principal's fiduciary with a duty of loyalty, and is obliged to act in the principal's best 

interests. See Dubbs v. Stribling & Assocs., 274 A.D.2d 32, 35 (1st Dept. 2000). The broker 

must remain faithhl to the principal in all matters within the scope of the broker's employment. 

Id. Moreover, a broker acting as an agent "is charged with a duty of loyalty and may not have 

interests in the subject transaction which are adverse to those of his principal." TPL Assocs. v. 

Helmsley-Spear, Inc., 146 A.D.2d 468, 470 (1st Dept. 1989). If conflicts of interest exists, a 

broker must disclose them to the principal. See Stevens Residential Sales, LLC, v. Oxford Cap. 

Corp., 306 A.D.2d 1 12, 1 12 (1 st Dept. 2003) (broker's failure to disclose kickback payments 

constituted breach of fiduciary duty.) 

In opposition, the Movants argue that life settlement brokers are merely finders of 

business opportunities, who as a rule hold no fiduciary duty to their clients. Under the law, the 

distinction between a broker and a finder is that 

The finder is required to introduce and bring the parties together, without an 

obligation orpower to negotiate the transaction, in order to earn the finder's 

fee. . . . While a broker performs the same introduction task, the broker must 

ordinarily also bring the parties to an agreement. 

Page 9 of 12 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 12 of 18
N.E. Gen. Corp. v. Wellington Advert., Inc. 82 N.Y.2d 158, 163 (1 993)(emphasis supplied). 

Here, the State alleges that the brokers do not merely find willing buyers, but "shop the policies", 

negotiate the transactions, and serve as auctioneers that solicit bids from competing buyers. In 

short, the brokers serve a central role in life settlement transactions that exceeds that of a 

business opportunity finder. The brokers' role in life settlements give rise to their fiduciary 

duties to the sellers, and accordingly the State states a claim that the Movants aided and abetted 

breaches of those duties. 

Unjust enrichment - The complaint alleges that the Coventry First was unjustly enriched 

because it purchased life settlements at less than fair-market prices without properly 

compensating the sellers. The claim for unjust enrichment is dismissed because Coventry First 

and the sellers entered into written life settlement contracts of sale, and the quasi-contractual 

claim of unjust enrichment cannot be asserted in a dispute that is governed by an express 

contract. See, e.g., MJMAdvert., Inc. v. Panasonic Indus., Inc., 294 A.D.2d. 265, 266 (2d Dept. 

2002). In any event, the unjust enrichment claim is redundant, because the State can seek redress 

for the Movants' allegedly wrongful profit at the sellers' expense in its claim under the Executive 

Law. 

Arbitration - In the second motion, the Movants contend that the State is compelled to 

arbitrate its public enforcement action against Coventry First to the extent the State's claims are 

connected with individual life settlement sellers who entered into contracts with Coventry First 

that included arbitration agreements. This argument lacks merit, since the State is not a party to 

any of those arbitrations agreements. Both the Federal Arbitration Act (the "FAA") and New 

York statue governing arbitration are only enforceable against parties that have agreed to 

Page 10 of 12 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 13 of 18
arbitrate. 9 U.S.C. tj 2; CPLR tj 7503(a). See also EEOC v. Waffle House, Inc., 534 U.S. 279, 

293-94 (2002) (holding that the FAA does not apply to an enforcement actions brought by a 

government entity unless it has agreed to arbitrate, even if it seeks victim-specific monetary 

relief). The Movants cite three cases from other jurisdictions which required state agencies that 

sought relief on behalf of individuals who had signed arbitration agreements to stand in the 

individuals' shoes and submit to arbitration. Olde Discount Corp. v. Tupman, 1 F.3d 202, 204 

(3d Cir. 1993); Ropp v. 171 7 Cap. Mgt. Co., No. 02-1 701,2004 WL 93945 (D. Del. Jan. 14, 

2004); Ralphs Grocery Co. v. Massie, 116 Cal. App.4th 1031 (Cal. Ct. App., 4th Dist., 2004). 

This Court is unpersuaded by the reasoning of the courts in those cases and declines to follow 

them. Accordingly, the motion to compel arbitration is denied. 

Cross-motion - Finally, the State cross-moves without opposition for an order 

substituting Attorney General Andrew Cuomo for former Attorney General Eliot Spitzer in the 

caption. The cross-motion is granted without opposition. 

ORDERED that the causes of action in the complaint are dismissed only insofar as they 

pertain to life settlement transactions that do not involve New York life settlement brokers, New 

York policy sellers, or alleged misconduct in New York, and it is further 

ORDERED that, except to the extent stated above, the motion to dismiss the first, second, 

and sixth causes of action is denied, and it is further 

ORDERED that the motion to dismiss the third, fourth, and fifth causes of action are 

granted and those causes of action are severed and dismissed, and it is further 

ORDERED that the motion to compel plaintiff to arbitrate and stay this proceeding 

pending arbitration is denied, and it is further 

Page 11 of 12 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 14 of 18
ORDERED that the cross-motion for an order substituting Andrew M. Cuomo, the 

Attorney General of the State of New York, as plaintiff in the place of Eliot Spitzer, the former 

Attorney General, is granted without opposition, and it is further 

ORDERED that Andrew M. Cuomo, the Attorney General of the State of New York, is 

substituted as plaintiff in the place of Eliot Spitzer, the former Attorney General, and it is further 

ORDERED, that all papers, pleadings, and proceedings in the above-entitled action are 

amended by substituting the name of Andrew M. Cuomo as plaintiff in the place of Eliot Spitzer, 

without prejudice to the prior proceedings in this action, and it is further 

ORDERED that plaintiff is directed to serve a copy of this order on the Clerk of the Court 

and the Trial Support Office (Room 158), who are directed to mark their records accordingly to 

reflect the substitution and change in the caption of this action, and it is further 

ORDERED that the parties are directed to appear before the Court for a preliminary 

conference on October 16, 2007 at 9:30 a.m. (Courtroom 208, 60 Centre St., NY, NY). 

Dated: September 25, 2007 

Helen 

0 

E. Freedman, J.S.C. 

Page 12 of 12 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 15 of 18
Exhibit B 

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 16 of 18
Coventry Delivers More than $175 million to New York Policyowners 

FORT WASHINGTON, Pa., Oct. 12 -- Coventry First, the

leader in the secondary market for life insurance, announced today that it

has paid New York consumers $175 million for their life insurance policies.

Had the policies been surrendered to the life insurance companies, the

consumers, who are typically over age 60, would have only received $45

million.

Nationally, Coventry has paid consumers $1.85 billion. Had the

policies been surrendered to the life insurance companies, the consumers

would have received less than $650 Million.

Historically, consumers have had only one option. They could sell their

policy back to the insurance company. There was no other option, no choice.

Instead, if they qualify, they can enter into a life settlement and sell

the policy in the secondary market, where it will typically sell for an

amount that is significantly higher than the cash surrender value.

"Life insurance is a valuable asset, and policyowners should keep their

policies," stated Alan Buerger, Coventry's Chief Executive Officer. "If,

however, for some reason, the coverage is no longer needed, policyowners

should consider the benefits of selling their policies in the secondary

market. A life settlement makes life insurance more flexible and more

valuable. It makes insurance a powerful estate and business planning tool

that enables the efficient reallocation of life insurance assets."

Life settlements are typically most appropriate for high net worth

individuals, businesses or trusts when the life insurance policies are no

longer needed or otherwise not performing up to expectations. Policyowners

should consult with their financial advisors before making a decision to

sell their policies in the secondary market. The insured must be age 60 or

above and the face amount must be in excess of $250,000.

###

About Coventry

Coventry (http://www.coventry.com) bridges insurance and capital markets to

create groundbreaking products for the financial services industry. The

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 17 of 18
company is the leader in the secondary market for life insurance and

pioneered the resulting life settlement industry. Fueled by bold ideas,

impeccable standards and a deep understanding of structured finance and

life insurance, Coventry has ignited a transformation by opening new

opportunities for investors, consumers and the financial professionals who

serve them. Based in Fort Washington, PA, Coventry is the first secondary

market company to ever receive Standard & Poor's highest Servicer ranking

and was ranked #1 in the insurance category of the INC. 500 listing of the

fastest growing privately held companies in America.

Case 1:07-cv-03494-DLC Document 69 Filed 10/19/2007 Page 18 of 18