A former executive at collapsed Chesterfield-based lender Live Well Financial has reached an agreement to end a dispute over the company’s bankrupt assets.
Eric Rohr, who served as the company’s chief financial officer from 2008 to 2018, reached an agreement with trustee David Carickhoff last week.
Rohr was among a group of defendants in a sweeping lawsuit filed by the trustee last summer seeking to recover hundreds of millions of dollars for Live Well creditors.
By targeting Rohr, the trustee sought to hold him financially responsible for his role in the alleged bond pricing scheme that led to Live Well’s demise, and to recover $3.5 million allegedly transferred to Rohr from Live Well in the last years of the company.
As part of the settlement, Rohr will pay $25,000 to the Live Well Estate, and will waive its right to make any future claims against the estate and any right to coverage under the Directors’ Liability Insurance Policy and company leaders.
He also agrees to cooperate with the trustee as Carickhoff continues to seek more funds from other insiders. This includes participating in interviews with the trustee’s camp and testifying when called.
Rohr, who could not be reached for comment, denied the trustee’s claims, according to the settlement document. The agreement allows Rohr to settle the dispute without admitting liability.
The settlement still needs to be approved by the bankruptcy court. Live Well’s Chapter 7 case takes place in Delaware, where the company had been incorporated.
Rohr served as Live Well’s chief financial officer from December 2008 to December 2018, six months before it was forced into bankruptcy by three of its biggest lenders.
In August 2019, Rohr pleaded guilty to federal criminal charges on a five-count indictment, including securities fraud, wire fraud, and bank fraud. These charges, brought by federal prosecutors, allege that Live Well wrongfully inflated the value of its reverse mortgage bond portfolio in order to trick its lenders into lending it more money than they normally would.
Rohr’s guilty plea agreement called for his cooperation in prosecuting Live Well founder and CEO Michael Hild, who has been hit with similar charges. Hild, who pleaded not guilty, was found guilty after a 3-week jury trial last summer. He continues to maintain his innocence and is set to plead his case for a possible acquittal or retrial next month.
A settlement was also reached between the Live Well estate and Ernest Calabrese, who worked on the company’s bond trading desk from August 2014 to May 2019.
Calabrese has not been charged criminally or civilly by any federal authority related to Live Well, nor has he been formally sued by the bankruptcy trustee.
Despite this, Calabrese and his wife agreed to pay $43,000 to the estate based on the trustee’s claim that the bonuses paid by Live Well to Calabrese were based on inflated bond values.
The trustee remains in litigation with other defendants. Among them are Hild, his wife Laura and more than a dozen business entities connected to the couple, from which Carickhoff is seeking to recover a total of $110 million in damages. The trustee alleges that Hild plundered the fast-growing reverse mortgage company by staging the scheme and that Laura helped her husband hide the proceeds by parking them in LLCs, all of which were in Laura’s name.
The Hilds have yet to file a response to the trustee’s complaint.
The trustee also sued Darren Stumberger, the former bond trader at Live Well, who pleaded guilty to the same charges as Hild and Rohr and acted as a key witness in Hild’s case. Stumberger is also awaiting sentencing in his criminal case and has yet to file a response in the bankruptcy case.