Industry: Investment Banking
Challenge: A $100 million settlement with Goldman Sachs marked the end of the road for litigation over the 1999 collapse of General American Life. The settlement included $30,000 in court costs. The parties arrived at the amount through court-ordered mediation. The settlement brought to $242 million the total collected from former General American directors and advisers.
The lawsuit claimed Goldman Sachs failed to provide promised credit of up to $2 billion when General American suffered a liquidity crisis; undervalued General American by up to $700 million when the investment bank said MetLife’s offer of $1.2 billion for the insurance company’s assets was fair; and failed to disclose that MetLife was a Goldman Sachs client before the investment bank gave its opinion of the sale.
Solution: Donna Beck Smith served as an expert for the plaintiff. Based on her experience as Assistant Treasurer and Treasurer of two publicly traded companies, she testified on:
- Financing and credit options available to General American, which could have prevented the company’s 1999 credit rating downgrade and/or its liquidity shortfall
- Various liquidity alternatives, which would have precluded the state supervision and ultimate sale of General American
For more information about our Financial Advisory Services contact Donna Beck Smith, CPA/ABV/CFF, ASA, Cr. FA, at 314.983.1259 or firstname.lastname@example.org.