Judge Solis: OSU, Pickens Weren't Tricked into Buying Life Insurance

By MARK CURRIDEN
The Texas Lawbook
A federal judge in Dallas has ruled that neither Oklahoma State University athletic officials nor its fund-raisers were tricked or defrauded into buying huge life insurance policies on elderly alumni in hopes of generating revenue when they died.
OSU’s athletic fund-raising arm, Cowboy Athletics, made national headlines five years ago when it announced that oilman T. Boone Pickens and 26 other alumni had agreed to allow the university to purchase $10 million life insurance policies, which reportedly would have raised as much as $350 million in benefits.
But in 2009, the “Gift of a Lifetime,” as it was officially called, ran into trouble.
OSU had paid $33 million in premiums for two years and was facing another $16 million payment.

“Cowboy Athletics ran into three problems,” said attorney Bill Brewer, who represented Larry Anders, the general agent and broker who has been sued by Cowboy Athletics and Pickens. “The bad financial markets caused one of the school’s primary funding sources to dry up. Second, they had not arranged for premium financing because they depended on the funding sources.
“And none of the 27 people died,” he said Monday.
Cowboy Athletics canceled the policy, claiming that it had not been properly served the insurance policies in 2007. Lincoln National Life sued, claiming breach of contract.
Cowboy and Pickens countersued, saying they wanted the $33 million back. They accused Anders and Lincoln of fraud and negligence.
On Friday, U.S. District Judge Jorge Solis rejected all claims by the OSU officials and Pickens. He pointed out that OSU’s athletic director, Mike Holder, signed in 2007 that he had received all the insurance policy documents and had read them, which he later admitted he had not.
Judge Solis also rejected Pickens’ claim that he had been defrauded or misled by the “Gift of a Lifetime” effort.
“Pickens own book states that, ‘We came up with the plan to help OSU through an innovative life insurance plan,'” the judge wrote.
“At the same time,” Judge Solis ruled, “Pickens was pressuring both Cowboy and the Brokers to get a deal done regardless of whether premium financing was in place and Holder knew that the alternative was ‘Not Pretty’ and that ‘all out heads will roll’ if a deal was not consummated.”
Efforts to reach lawyers for Pickens and Cowboy Athletics were unsuccessful.
 
PLEASE NOTE: Content of The Texas Lawbook is controlled and protected by specific licensing agreements with our subscribers and under federal copyright laws. Any distribution of this content without the consent of The Texas Lawbook is prohibited.