[LTPC-discussions] Original attorney letter - comment
S T Cuscovitch
ltpc-disc@ltpcalums.com
Wed, 9 Jul 2003 00:21:41 -0400
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Richard:=20
=20
Comments --=20
<...6.By hiring lets say 200 agents, train them put them in field over =
past two years and then close company you basically stop agents from =
being vested. This income remains with Progeny as a huge cash =
receivable over the life of the policy which could be up to 15 years or =
more.
7.New agents hired over past two years and then quitting is good too. =
Not only do they lose renewals, but first year commission if they are =
not with Progeny. An example, policy is sold for $2000 a year. =
Commission to agent about 30 percent, or $600. Agent leaves before =
policy is issued he does not receive $600. Renewals to company over ten =
years are about 10percent a year or another $2000 to Progeny over ten =
years. Large cash receivable to Progeny...>
In our industry and with the advent of "structured finance", the [value =
of] renewals may not have to be carried as "cash receivables".
For example, if Progeny/Cendant decided to "securitize" policies (eg. =
issue asset-backeds for the pool of policies), they could instead swap =
renewal income [ie. transfer to a 3rd party, incl risk of non-renewals] =
for immediate cash. It's not clear if that was done, or will be done -- =
but it's a possible scenario. In essence, it would allow Progeny/Cendant =
to exit the business cleanly, pay off immediate or past expenses, IOUs, =
promises, etc.=20
This is why legal firm needs to consider accounting & financial aspects =
of the case, the money & asset flows (the famous "follow the money"). As =
agents/ex-EEs, we have no insights into accounting, P&L, or balance =
sheet (do we?) - though its ironic to think that your vesting guarantees =
relies on the soundness of the guarantor.
Accounting, P&L, balance sheet -- it's all opaque, but it makes a =
difference in the case (IMO) and something I would think a law firm =
would want to delve into (though they may not be in tune with LTCi and =
structured finance unless "jogged" to consider it).
Fundamental is the question -- "what is (or will be) the disposition of =
{ the legal entity} LTPC?" Is it bankrupt? Or will it remain "intact", =
though functioning with skeletal crew? Or has/will it morph into =
Progeny?=20
What happens to LTPC assets? Any outside claim on its assets (thinking =
here mainly soft or intangibles - such as leads, training sys, =
methodologies, client base, software, data bases)? Or have assets =
somehow found their way or been "pledged" to (e)Xs?=20
Fundamental -- what were the business factors that caused LTPC to shut =
down?=20
Were the efforts of the new agents added these past 2 years, =
Progeny's/LTPC's funding mechanism for an exit strategy? If yes, that =
would piss me off.
Will the attorneys answer these questions or do we know the answers =
already?
STC
----- Original Message -----=20
From: ShampooRic@aol.com=20
To: ltpc-disc@ltpcalums.com=20
Sent: Tuesday, July 08, 2003 10:54 PM
Subject: [LTPC-discussions] Original attorney letter
This was original letter to attorney several weeks ago. =20
Re: Termination from Progeny Marketing and Innovation, a subsidiary of =
Cendant.
Will try and make this brief to find out if the three to four hundred =
plus agents and home office staff have been wronged and mislead to by =
Progeny Marketing and Innovation.
Progeny Marketing and Innovation sold Long Term Care Plans of =
insurance. They marketed this coverage through banks, credit union, =
associations across the country. The agents would receive the leads and =
call on the person who sent it in and arrange an appointment to go over =
coverage and possibly sell a policy.
Progeny has been doing this for 12 years and doing it well. Some of =
the agents and management have been with them for 11 and 12 years. They =
grew to several hundred agents in the field and support and training =
staff which was centered in Nashville Tenn.
The agents were supported in the field by a regional sales manager who =
had approximately 20 to 30 agents under him. He was responsible for =
hiring and additional in the field.
March 26th of this year about half the agent staff about was given =
letters of termination. Given a 60 day notice that their services would =
no longer be needed. Along with the agents the training staff was =
terminated. The training staff in Nashville was terminated before this. =
Basic training was done in Nashville up until January. With training =
staff eliminated all training of new agents was now done in the field =
locally.
Company was supposed to have a conference in early January of this =
year with over a hundred agents. Agents had to sell $40,000 worth of =
business over a period of three months during September, October, and =
November to qualify. Probably over 100 qualified for this incentive and =
trip to Nashville for 3 nights. Conference was postponed in January, =
then two more times. The last scheduled conference was for end of =
April. This to was canceled. Agents invited to April conference were =
those agents that were not terminated on March 26th. So agents that =
were terminated first time were not given invitations to this =
conference. Many who qualified for this trip were now being terminated. =
There was another postponement but that was due to the worry about =
terrorism in Orlando area. That is what they told us.=20
Second letter of termination was given out April 20th letting those =
remaining that Progeny Marketing and innovation was now going to cease =
all operations and close up eliminating all agents. This would be =
effective June 20, 2003. No conference, company closing. However =
progeny marketing will still be in business just not selling anymore =
long term care insurance through its agents in the field.
Now to get down to the main points to see if the agents and the =
support staff have a case against Progeny and Cendant.=20
1.Several agents in field and management claim to know that Progeny =
was planning on shutting down from June of 2002.
2.Promises were made to staff in memos, voice mail, meetings that =
Progeny was moving ahead. Great plans for the future. You had a future =
with Progeny. Conferences planned. New training.
3.It seems that in the past two years Progeny decided to expand the =
sales force, lowering standards and hiring and training about 20 agents =
every two weeks in Nashville to send out in the field. To double the =
sales force.
4.One of the main reasons we become agents, the main incentive is that =
with every policy sold we build a book of business. Over time we start =
earning renewal commission after a year on policies sold. In this way =
we increase our paychecks and build for our furture. Big incentive to =
stay with company.
5.To get vested of these renewal which would be between 3 percent and =
7 percent of paid yearly premium you had to produce $350,000 of =
insurance premium that was in force. This could take from 2 to 4 years =
depending on how good an agent you were.
6.By hiring lets say 200 agents, train them put them in field over =
past two years and then close company you basically stop agents from =
being vested. This income remains with Progeny as a huge cash =
receivable over the life of the policy which could be up to 15 years or =
more.
7.New agents hired over past two years and then quitting is good too. =
Not only do they lose renewals, but first year commission if they are =
not with Progeny. An example, policy is sold for $2000 a year. =
Commission to agent about 30 percent, or $600. Agent leaves before =
policy is issued he does not receive $600. Renewals to company over ten =
years are about 10percent a year or another $2000 to Progeny over ten =
years. Large cash receivable to Progeny.=20
8.Many in the sales force and management that this was decided to =
close up Progeny now before those hundreds of agents in field could be =
vested.
9.Turnover of sales force was accepted because it made good business.
10.Standards lowered this past two years to build sales force just so =
they would quit and bring in new agents only to close Progeny before =
they are vested.
11.We are not allowed to contact or approach our clients for 18 months =
from termination. Even if our clients are friends or family and clients =
that we brought in.
12.Progeny was still hiring and telling us that we were moving forward =
in February. Agents were being trained in field by managers that knew =
that they were not going to be around in a few weeks, and given =
termination papers. Down here in Fort Lauderdale I satin on a training =
session in February of several new agents who went through the hiring =
process, made promises too, and then licensed and put in field and then =
terminated.
13.These new agents wasted weeks and months when they could have been =
working for another company. Some came to work for Progeny and passed =
up other opportunities and lost income to work for Progeny. Company =
knew it was closing when it hired these agents. Training staff in =
Nashville was already eliminated. Managers knew they were wasting their =
time in the field.
14.Progeny website was still up and advertising company and employment =
for Long Term Preferred Care up until June 20th.
15.Were the agents and the support staff mislead into staying and =
writing business when the company knew it was going to fold?
16.Were we mislead that we had a future when it appears they did this =
in this manor so as not to vest agents?
17.Was there a conflict of interest? President f Progeny Mr. Robert =
Foreman who over the year tells us things are doing well. That we =
should be captive agents. That the company is not being sold. Then =
leaves Progeny and goes to work for Long Term Preferred Associates which =
is a large brokerage. He solicits ex Progeny agents in hopes that we =
work for his company as a broker, which is the opposite arrangement of =
being a captive agent with Progeny. Solicits us with new and better =
contract with vesting from day one. =20
18.Why was Progeny not sold? Maybe to keep all renewals.
19.Policies that we sold we can not deliver if approved after the 20th =
of June.
20.We can not follow through with an application and make sure all =
requirements are done to get policy approved after June 20th.
21.Hundreds of us worked and stayed with the company because we =
thought we had a future. Believe we were lied to aobut company closing =
so we stay and write business that we will never see renewals on, plus =
wasted almost a year with Progeny if they knew we were closing, that =
this was their plan, and we could have worked somewhere else the last =
year and built a book of business their.
22.Progeny made it look as if the company was going forward, by hiring =
new agents, mailings to clients, planning conventions that never =
materialized to retain agents while all the while planning on its =
discontinuence.
This is the basics of our complaints. There are over a hundred of us =
that are on a website for ex Progeny employees and we are trying to =
figure out if we have a legitimate complaint. Possibly a class action =
suite against Progeny and Cendant, or should I file separately and =
negotiate a seperate solution if I have a case. Cendant might not be =
totally aware of this for they are a huge company and Progeny is just a =
blip to them.
I am enclosing some of the emails that have been posted in the website =
and a copy of my contract and some letters from Progeny.
Please take a look at this and let me know if we have a grievance so I =
can relay it back to the other ex employees so we can then make a =
decision how to proceed.
Sincerely
Richard Moore
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<DIV><FONT face=3DArial size=3D2>
<DIV><FONT face=3DArial size=3D2>Richard: </FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV>Comments -- </DIV></FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2><...6.By hiring lets say 200 agents, =
train them=20
put them in field over past two years and then close company you =
basically stop=20
agents from being vested. This income remains with Progeny as a =
huge cash=20
receivable over the life of the policy which could be up to 15 years or=20
more.<BR></DIV></FONT>
<DIV><FONT face=3DArial size=3D2>7.New agents hired over past two years =
and then=20
quitting is good too. Not only do they lose renewals, but first =
year=20
commission if they are not with Progeny. An example, policy is =
sold for=20
$2000 a year. Commission to agent about 30 percent, or $600. Agent =
leaves=20
before policy is issued he does not receive $600. Renewals to =
company over=20
ten years are about 10percent a year or another $2000 to Progeny over =
ten years.=20
Large cash receivable to Progeny...></FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>In our industry and with the advent of =
"structured=20
finance", the [value of] renewals may not have to be carried =
as "cash=20
receivables".</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>For example, if Progeny/Cendant decided =
to=20
"securitize" policies (eg. issue asset-backeds for the pool of =
policies), they=20
could instead swap renewal income [ie. transfer to a 3rd party, incl =
risk of=20
non-renewals] for immediate cash. It's not clear if that was =
done, or=20
will be done -- but it's a possible scenario. </FONT><FONT face=3DArial =
size=3D2>In=20
essence, it would allow Progeny/Cendant to exit the business =
cleanly, pay=20
off immediate or past expenses, IOUs, promises, etc. </FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=3DArial size=3D2>This is why legal firm needs to=20
consider accounting & financial aspects of the case, the money =
&=20
asset flows (the famous "follow the money"). As agents/ex-EEs, we have =
no=20
insights into accounting, P&L, or balance sheet (do we?) - though =
its ironic=20
to think that your vesting guarantees relies on the soundness of the=20
guarantor.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Accounting, P&L, balance sheet -- =
it's all=20
opaque, but it makes a difference in the case (IMO) and something I =
would=20
think a law firm would want to delve into (though they may not be in =
tune with=20
LTCi and structured finance unless "jogged" to consider =
it).</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=3DArial size=3D2>Fundamental is the question -- "what is =
(or will=20
be) the disposition of { the legal entity} LTPC?" Is it =
bankrupt? Or=20
will it remain "intact", though functioning with skeletal crew? Or =
has/will=20
it morph into Progeny? </FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>What happens to LTPC assets? Any =
outside claim on=20
its assets (thinking here mainly soft or intangibles - such as leads, =
training=20
sys, methodologies, client base, software, data bases)? Or have assets =
somehow=20
found their way or been "pledged" to (e)Xs? </FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=3DArial size=3D2>Fundamental -- what were the =
business factors=20
that caused LTPC to shut down? </FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=3DArial size=3D2>Were the efforts of the new =
agents added these=20
past 2 years, Progeny's/LTPC's funding mechanism for an exit strategy? =
If yes,=20
that would piss me off.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=3DArial size=3D2>Will the attorneys answer these =
questions or do we=20
know the answers already?</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=3DArial size=3D2>STC</FONT></DIV>
<BLOCKQUOTE=20
style=3D"BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: =
0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
<DIV style=3D"FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV=20
style=3D"BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: =
black"><B>From:</B>=20
<A href=3D"mailto:ShampooRic@aol.com"=20
title=3DShampooRic@aol.com>ShampooRic@aol.com</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>To:</B> <A=20
href=3D"mailto:ltpc-disc@ltpcalums.com"=20
title=3Dltpc-disc@ltpcalums.com>ltpc-disc@ltpcalums.com</A> </DIV>
<DIV style=3D"FONT: 10pt arial"><B>Sent:</B> Tuesday, July 08, 2003 =
10:54=20
PM</DIV>
<DIV style=3D"FONT: 10pt arial"><B>Subject:</B> [LTPC-discussions] =
Original=20
attorney letter</DIV>
<DIV><BR></DIV><FONT face=3Darial,helvetica><FONT face=3DArial =
lang=3D0 size=3D2=20
FAMILY=3D"SANSSERIF"><B>This was original letter to attorney several =
weeks=20
ago. </B><BR><BR><BR>Re: Termination from Progeny Marketing and=20
Innovation, a subsidiary of Cendant.<BR><BR>Will try and make this =
brief to=20
find out if the three to four hundred plus agents and home office =
staff have=20
been wronged and mislead to by Progeny Marketing and=20
Innovation.<BR><BR>Progeny Marketing and Innovation sold Long Term =
Care Plans=20
of insurance. They marketed this coverage through banks, credit =
union,=20
associations across the country. The agents would receive the =
leads and=20
call on the person who sent it in and arrange an appointment to go =
over=20
coverage and possibly sell a policy.<BR><BR>Progeny has been doing =
this for 12=20
years and doing it well. Some of the agents and management have =
been=20
with them for 11 and 12 years. They grew to several hundred =
agents in=20
the field and support and training staff which was centered in =
Nashville=20
Tenn.<BR>The agents were supported in the field by a regional sales =
manager=20
who had approximately 20 to 30 agents under him. He was =
responsible for=20
hiring and additional in the field.<BR><BR>March 26th of this =
year about=20
half the agent staff about was given letters of termination. =
Given a 60=20
day notice that their services would no longer be needed. Along =
with the=20
agents the training staff was terminated. The training staff in=20
Nashville was terminated before this. Basic training was done in =
Nashville up until January. With training staff eliminated all =
training=20
of new agents was now done in the field locally.<BR><BR>Company was =
supposed=20
to have a conference in early January of this year with over a hundred =
agents. Agents had to sell $40,000 worth of business over a =
period of=20
three months during September, October, and November to qualify. =
Probably over 100 qualified for this incentive and trip to Nashville =
for 3=20
nights. Conference was postponed in January, then two more =
times. =20
The last scheduled conference was for end of April. This to was=20
canceled. Agents invited to April conference were those agents =
that were=20
not terminated on March 26th. So agents that were terminated =
first time=20
were not given invitations to this conference. Many who =
qualified for=20
this trip were now being terminated. There was another =
postponement but=20
that was due to the worry about terrorism in Orlando area. That =
is what=20
they told us. <BR><BR>Second letter of termination was given out April =
20th=20
letting those remaining that Progeny Marketing and innovation was now =
going to=20
cease all operations and close up eliminating all agents. This =
would be=20
effective June 20, 2003. No conference, company closing. =
However=20
progeny marketing will still be in business just not selling anymore =
long term=20
care insurance through its agents in the field.<BR><BR><BR>Now to get =
down to=20
the main points to see if the agents and the support staff have a case =
against=20
Progeny and Cendant. <BR><BR>1.Several agents in field and management =
claim to=20
know that Progeny was planning on shutting down from June of=20
2002.<BR>2.Promises were made to staff in memos, voice mail, meetings =
that=20
Progeny was moving ahead. Great plans for the future. You =
had a=20
future with Progeny. Conferences planned. New =
training.<BR>3.It=20
seems that in the past two years Progeny decided to expand the sales =
force,=20
lowering standards and hiring and training about 20 agents every two =
weeks in=20
Nashville to send out in the field. To double the sales =
force.<BR>4.One=20
of the main reasons we become agents, the main incentive is that with =
every=20
policy sold we build a book of business. Over time we start =
earning=20
renewal commission after a year on policies sold. In this way we =
increase our paychecks and build for our furture. Big incentive =
to stay=20
with company.<BR>5.To get vested of these renewal which would be =
between 3=20
percent and 7 percent of paid yearly premium you had to produce =
$350,000 of=20
insurance premium that was in force. This could take from 2 to 4 =
years=20
depending on how good an agent you were.<BR>6.By hiring lets say 200 =
agents,=20
train them put them in field over past two years and then close =
company you=20
basically stop agents from being vested. This income remains =
with=20
Progeny as a huge cash receivable over the life of the policy which =
could be=20
up to 15 years or more.<BR>7.New agents hired over past two years and =
then=20
quitting is good too. Not only do they lose renewals, but first =
year=20
commission if they are not with Progeny. An example, policy is =
sold for=20
$2000 a year. Commission to agent about 30 percent, or $600. =
Agent=20
leaves before policy is issued he does not receive $600. =
Renewals to=20
company over ten years are about 10percent a year or another $2000 to =
Progeny=20
over ten years. Large cash receivable to Progeny. <BR>8.Many in the =
sales=20
force and management that this was decided to close up Progeny now =
before=20
those hundreds of agents in field could be vested.<BR>9.Turnover of =
sales=20
force was accepted because it made good business.<BR>10.Standards =
lowered this=20
past two years to build sales force just so they would quit and bring =
in new=20
agents only to close Progeny before they are vested.<BR>11.We are not =
allowed=20
to contact or approach our clients for 18 months from termination. =
Even if our=20
clients are friends or family and clients that we brought =
in.<BR>12.Progeny=20
was still hiring and telling us that we were moving forward in =
February.=20
Agents were being trained in field by managers that knew that they =
were not=20
going to be around in a few weeks, and given termination papers. =
Down=20
here in Fort Lauderdale I satin on a training session in February of =
several=20
new agents who went through the hiring process, made promises too, and =
then=20
licensed and put in field and then terminated.<BR>13.These new agents =
wasted=20
weeks and months when they could have been working for another =
company. =20
Some came to work for Progeny and passed up other opportunities and =
lost=20
income to work for Progeny. Company knew it was closing when it =
hired=20
these agents. Training staff in Nashville was already =
eliminated. =20
Managers knew they were wasting their time in the field.<BR>14.Progeny =
website=20
was still up and advertising company and employment for Long Term =
Preferred=20
Care up until June 20th.<BR>15.Were the agents and the support staff =
mislead=20
into staying and writing business when the company knew it was going =
to=20
fold?<BR>16.Were we mislead that we had a future when it appears they =
did this=20
in this manor so as not to vest agents?<BR>17.Was there a conflict of=20
interest? President f Progeny Mr. Robert Foreman who over the =
year tells=20
us things are doing well. That we should be captive =
agents. That=20
the company is not being sold. Then leaves Progeny and goes to =
work for=20
Long Term Preferred Associates which is a large brokerage. He =
solicits=20
ex Progeny agents in hopes that we work for his company as a broker, =
which is=20
the opposite arrangement of being a captive agent with Progeny. =
Solicits=20
us with new and better contract with vesting from day one. =
<BR>18.Why=20
was Progeny not sold? Maybe to keep all renewals.<BR>19.Policies =
that we=20
sold we can not deliver if approved after the 20th of June.<BR>20.We =
can not=20
follow through with an application and make sure all requirements are =
done to=20
get policy approved after June 20th.<BR>21.Hundreds of us worked and =
stayed=20
with the company because we thought we had a future. Believe we =
were=20
lied to aobut company closing so we stay and write business that we =
will never=20
see renewals on, plus wasted almost a year with Progeny if they knew =
we were=20
closing, that this was their plan, and we could have worked somewhere =
else the=20
last year and built a book of business their.<BR>22.Progeny made it =
look as if=20
the company was going forward, by hiring new agents, mailings to =
clients,=20
planning conventions that never materialized to retain agents while =
all the=20
while planning on its discontinuence.<BR><BR><BR>This is the basics of =
our=20
complaints. There are over a hundred of us that are on a website =
for ex=20
Progeny employees and we are trying to figure out if we have a =
legitimate=20
complaint. Possibly a class action suite against Progeny and =
Cendant, or=20
should I file separately and negotiate a seperate solution if I have a =
case. Cendant might not be totally aware of this for they are a =
huge=20
company and Progeny is just a blip to them.<BR><BR>I am enclosing some =
of the=20
emails that have been posted in the website and a copy of my contract =
and some=20
letters from Progeny.<BR><BR>Please take a look at this and let me =
know if we=20
have a grievance so I can relay it back to the other ex employees so =
we can=20
then make a decision how to=20
proceed.<BR><BR>Sincerely<BR><BR><BR><BR><BR>Richard=20
Moore<BR><BR></BLOCKQUOTE></FONT></FONT></BODY></HTML>
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