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, CVA, Cr. FA, at 314.983.1259 or   dsmith@bswllc.com.