[1] At the time, First Executive was the biggest insurer ever to fail, which resulted primarily from money-losing investments in junk bonds.
[2] According to Robert Sobel, First Executive was involved in 90% of Drexel's underwritings, which accounted for about $40 billion in bonds from 1982 to 1987.
After the State of California took over Executive Life, it sold the company's junk-bond portfolio to Altus Finance, a unit of Crédit Lyonnais, in November 1991 for $3.25 billion.
In early 1999, the California Insurance Department sued the bank and other parties, alleging fraud and seeking $2 billion in restitution.
[4] In 2003, Crédit Lyonnais and others agreed to pay $771 million in settlements resulting from false statements to bank regulators in connection with the acquisition of junk bonds and the insurance business of the failed Executive Life Insurance Company of California.