Coventry issues statement in response to Abacus Global lawsuit

Coventry released the following statement: “Abacus’s lawsuit is its latest misdirection and a transparent ploy designed to delay accountability and deflect attention from serious problems of Abacus’s own making,” said Alan Buerger, Coventry’s Chairman. “Coventry continues to believe that Lapetus systematically underestimates life expectancies, which directly threatens investor returns. This belief is validated by expert analysis that concluded exactly that. Abacus’s complaint claims that none of its valuations for policies it owns depend on Lapetus’s life expectancy estimates. The complaint also states that Abacus does not use a life expectancy valuation model to value the policies on its balance sheet, instead using “market-based fair value accounting. These claims contradict numerous statements Abacus has made in SEC filings, including that it “utilizes a multitude of inputs to determine the fair value of the policies it holds, which may include life expectancy reports generated by a company in which (Abacus) holds a minority ownership interest”, i.e., Lapetus, and that “(t)he valuation of life insurance policies will vary depending on the dates of the related mortality estimates and the medical underwriting firms that provide supporting information. Similarly, a registration statement for Abacus’s new fund offering discloses that it will use Lapetus as its “primary life expectancy provider” and that Lapetus “provides the most conservative life expectancy predictions. Contrary to what Abacus claims in its complaint, the registration statement is clear that “following acquisition” of a life insurance policy, the fund “expects to utilize Lapetus Solutions as its primary life expectancy provider” with respect to policy valuation. Abacus’s SEC filings belie the notion that it does not use life expectancies to value policies post-acquisition. Finally, and contrary to Abacus’s claims, Coventry had never heard of Morpheus Research before Morpheus published its initial short report on Abacus. Coventry is confident in the strength and integrity of its position and equally confident that Abacus’s lawsuit has no merit.”