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A Civil Contempt Blog: Scott Rothstein Redux 4: - What's Behind the Razorback Gibraltar Settlement; More Trojan Horses

in the Bankruptcy Gibraltar Settlement


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A Civil Contempt Blog

This blog will describe the unknown and unpublicized true story and bizarre circumstances surrounding the longest, still ongoing, civil contempt sanction in U.S. Federal Court history now lasting over 11 years, including an imprisonment of over 6 years.



Scott Rothstein Redux 4: - What's Behind the Razorback Gibraltar Settlement; More Trojan Horses in the Bankruptcy Gibraltar Settlement
Rothstein victims must surely believe they are being forced to own the equivalent of underwater Florida swamp land toxically polluted to boot in the form of the "50 million" in Gibraltar Bank insurance claims forced on them in the pending Gibraltar bankruptcy settlement. The insurance claims are virtually worthless and the Razorback settlement neatly avoided the Trojan horses inserted into the bankruptcy settlement. The largest Trojan horse in the bankruptcy Gibraltar "settlement" is, of course, the blanket waiver protecting from lawsuits all Gibraltar related targets the real deep pockets for Rothstein victim recovery: Deep pocket recovery targets include: Berger Singerman honchos (and Berger Singerman itself the bankruptcy powerhouse controlling the trustee's bankruptcy case) who partnered with Scott Rothstein to buy Gibraltar, their still unidentified Florida "movers and shakers" purchase partners who are also possible criminal targets , Boston Private and other sundry parties associated with the purchase and running of Gibraltar. Berger Singerman's insertion of the "claims waiver" provision protects them all. The real reasons the Razorback settlement was only for 10 million: Gibraltar Bank is a "zombie bank." It's dead ... but walking. Barely. Razorback plaintiffs know it is worthless win jury awards of potentially up to 1/2 billion dollars (based on recent the TD Bank results) because Gibraltar will immediately fold. Gibraltar is basically a shell with no equity left after depositor claims, the FDIC steps in, and the true value of its enormous loan portfolio is disclosed. Gibraltar was in deep financial trouble (and under investigation for money laundering for which it was ultimately cited) even before Rothstein liability became clear. That is why the Gibraltar "claims waiver" provision in the bankruptcy "settlement" is so large a Trojan horse. Only deep pocket targets Berger Singerman honchos, their unknown Gibraltar purchase partners, Boston Private and others can cover even part of Gibraltar's liability. But they all escape liability because of the tainted provision. To further understand: picture a piranha (Razorback) leading a pack attacking the "deep in the water" "zombie bank" (Gibraltar). It must pick the size of its bite very carefully. It must make sure the "zombie bank" still appears to be "walking" after the bite, otherwise, it chokes and must regurgitate the chunk when the FDIC steps in. In reality, Gibraltar Bank is "owned" by: 1) depositors (most of whom are largely uncovered by FDIC insurance because Gibraltar specializes in "wealth management"), and 2) Scott Rothstein's victims. Gibraltar's true value is 100's of millions less than the money "due" these two groups. So Berger


Stephan J. Lawrence I am an M.I.T. graduate and was originally a financial analyst for several major brokerages and private investment firms. I established a very successful trading company that collapsed in the October 1987 crash after Bear Stearns successfully embezzled 10's of millions of dollars from my companies using backdated fictitious trades that the Chicago Board Options Exchange and the Options Clearing Corp. eventually admitted never occurred. View my complete profile


2012 (4) February (4) Scott Rothstein Redux 4: What's Behind the Razor... Scott Rothstein Redux Part 3: - The Trojan Horses ... Scott Rothstein Redux Part 2: - More On The Gibral... Scott Rothstein Redux: The Gibraltar Bank "Settl... 2011 (7)[2/29/2012 9:53:46 PM]

A Civil Contempt Blog: Scott Rothstein Redux 4: - What's Behind the Razorback Gibraltar Settlement; More Trojan Horses in the Bankruptcy Gibraltar Settlement

Singerman honchos and the other Scott Rothstein purchase partners lost their equity long ago. Even without the 100's of millions in Rothstein victim liability, Gibraltar was is serious trouble because of chronic over reporting of bank loan asset values (a nationwide problem) and financial and loan problems, unique to Gibraltar, that have been regularly occurring as "surprises." The hidden bankruptcy chess game Gibraltar's stealth receivership: In effect, Gibraltar Bank's future is being decided now through a stealth receivership, in which there are four party groups: 1) depositors (eventually represented in part by the FDIC) (creditors); 2) Rothstein victims (creditors); 3) insurers (targets); and 4) Scott Rothstein's purchase partners (include Berger Singerman honchos) and still unknown others, Boston Private and others (targets). Berger Singerman, through control of the Rothstein bankruptcy, is using all of their considerable bankruptcy insider power and influence to assure the fourth group (including themselves) is completely removed as targets in a later receivership. The fourth group is the largest potential recovery group. The tainted bankruptcy settlement clause, baring all claims against Gibraltar related targets, accomplishes Berger Singerman's goal. How the Razorback group avoided other Trojan Horses in the bankruptcy Gibraltar settlement: The real value of the Gibraltar insurance claims can be seen just by looking at the principal insurance carrier defenses: Gibraltar lied in its insurance applications; Gibraltar management knew, or should have known, a massive Rothstein fraud was occurring and concealed that information in their insurance applications, which invalidated coverage. If the carrier defenses looks familiar, they should be. They are similar to the Rothstein victims' strong claims against Gibraltar Bank. In light of the explosive testimony recently given by Scott Rothstein, an active insurer defense exposes Gibraltar management and others to exposure of information relevant to further possible civil and/or criminal claims. So, Gibraltar has good reason to dump their insurance claims and the legal costs to pursue those claims on the backs of the Rothstein victims, as specified in the tainted bankruptcy settlement. The Razorback plaintiffs did not fall into this trap. Gibraltar must pursue their own insurer claims in the Razorback settlement. By assigning the insurance claims to the bankruptcy estate, those claims will be then controlled by Berger Singerman, who will collect legal fees from the victims (not from Gibraltar) to pursue those claims while keeping tabs on exactly what information is disclosed. For their part, the insurers will have the silent advantage of knowing of Berger Singerman reluctance to have information harmful to them disclosed at trial and use that information to reduce even the minimal expected recovery. A cynic would predict: there will be no trial, only a sealed "settlement" after a suitable period of fee "milking" has occurred. Equally important, the bankruptcy "settlement" means Gibraltar (and its insiders) turn the tables on the victims by forcing them to repudiate their position of Gibraltar wrongdoing. The victims must now vigorously defend Gibraltar management and bankruptcy insider shareholders their alleged victimizers to recover any losses from the carriers. Rothstein victims can certainly be excused for believing that forcing them pay millions in legal fees to defend Gibraltar management and Berger Singerman honchos' Gibraltar actions that they allege resulted in defrauding them is adding insult to injury by, yet again, victimizing them. The next post will tie together the issue of claims against Gibraltar insiders, show why they are primary targets for recovery and point out some unexplored areas that require further investigation.

Posted by Stephan J. Lawrence at 4:21 PM Labels: bankruptcy court, bankruptcy victims, Berger Singerman, Gibraltar Bank, Paul Singerman, Scott[2/29/2012 9:53:46 PM]

A Civil Contempt Blog: Scott Rothstein Redux 4: - What's Behind the Razorback Gibraltar Settlement; More Trojan Horses in the Bankruptcy Gibraltar Settlement
Rothstein, Settlement, TD Bank

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