A lawsuit was filed earlier this month in federal court against the board of Life Partners, alleging breaches of fiduciary duty resulting from “gross and reckless mismanagement.”

The plaintiff, Life Partners shareholder Harriet Goldstein, filed suit June 9 in U.S. District Court in Waco, Texas. She named Brian Pardo, Scott Peden, Fred Dewald, Tad Ballantyne and Harald Rafuse.

Goldstein also alleged that Pardo, chief executive of Life Partners Holdings, the parent company of Waco, Texas, provider Life Partners, and Peden, general counsel of the parent company, benefited from “insider-selling” non-public information when they sold artificially inflated shares of stock in the firm between 2007 and 2009.

The suit said Pardo sold 368,807 shares in the Pardo family trust for $7.5 million and Peden sold 19,531 shares for $301,270.

The suit alleges derivative claims of breach of fiduciary duty, breach of fiduciary duty for failing to oversee the company and maintain internal controls, gross mismanagement and unjust enrichment.

Commentary by Michael Abraham:

I wonder which liquidator is supporting this action!

Published on 24 Aug 2011 at 02:57 pm