Life insurance seller is told to pay $3 million judgment

Don't be surprised if a rare, 1790 Stradivarius violin pops up on Craigslist.

The owner, Michael Antonello, is a noteworthy violinist whose career selling life insurance led to him becoming an arts patron and namesake of a concert hall at the MacPhail Center for Music in Minneapolis. But after the state levied a $250,000 fine and revoked his insurance license in December 2009 on allegations of fraud and misrepresentation, Antonello's been selling off pieces of his art collection.

Now, a Hennepin County judge has slapped Antonello with $3 million in judgments in a contract dispute involving some life insurance policies he sold several years ago.

According to court records, Antonello, 59, sold seven policies valued at $30 million to Nathan Bentson on the life of his wife, Barbara, 81. Nathan Bentson, a former broadcasting executive from St. Paul, died of cancer in 2009 at the age of 87. But before he died, he transferred the insurance policies into two trusts, which sued Antonello for breach of contract.

The crux of the case is this: When Antonello sold Bentson the policies, he guaranteed that he could resell them quickly after a 25-month "contestability period" ended. If not, he promised to buy them back for the price of the premiums, plus interest of 12 or 15 percent, depending on the policy.

But by the time the policies were eligible to be sold, the secondary life insurance market had collapsed.

The Commerce Department revoked Antonello's insurance license because he allegedly was selling mammoth policies with an intent to resell them to investors. Minnesota allows the sale of life insurance only to someone with a genuine interest in the life of the insured, like a family member or business partner.

Antonello couldn't be reached for comment Friday.

Court documents show that in an e-mail dated Dec. 18, 2009, Antonello said he had every intention of buying back the policies from the Bentson trusts.

"You are undoubtedly familiar with my recent struggles with the Commerce Department this year," he wrote. "It is actually an excellent settlement for me, in light of some very positive things that we have pending this year. My real troubles, however, have not been related to Commerce, but frankly the economic collapse of September 2008, and the near-total collapse of the secondary market."

Antonello said in the e-mail that he had run out of cash and begun aggressively selling his art collection to get rid of bank debt.

Phillip Gainsley, the attorney for the trusts, said Antonello offered to buy the policies back over time, but offered no definite schedule. "He wanted us to wait indefinitely," Gainsley said.

Judge Gary Larson granted the trusts' motion for summary judgment on Feb. 11, noting that there was no dispute over the amounts owed, the validity of the guarantees or Antonello's obligation to follow through on them immediately.

"Mr. Antonello disagrees with the court's decision and is considering his legal options to appeal," Eric Brever, his attorney, said in an e-mail Friday.