Celia Clark, the lawyer who formed the Avrahamis’ micro captive Feedback, has weighed in on the court's decision to deny the Avrahamis’ motion for reconsideration.
Clark claimed that the administrative actions policy, which Judge Mark Holmes criticised in his decision, had “drafting virtually identical” to templates that have often been reviewed and approved by the IRS for use by small captive insurance companies.
According to Clark, a template of the administrative actions policy, along with other policies at use in Avrahami, had been offered at trial but were not accepted into evidence.
In his ruling, Holmes said that the policy exemplified the “sloppy drafting” of Feedback’s policies, but Clark argued that this was a generalisation.
The Avrahamis explained that the policies at issue were claims-made policies, not occurrence policies, but the court responded by referring to a specific policy which “was so ill-drafted that it was both a claims made and an occurrence policy”.
Holmes reached his original verdict in August, deciding that payments made to the Avrahamis by their micro captive were outside the scope of certain tax elections.
He suggested that the captive did not operate like an insurance company as it issued policies with unclear and contradictory terms, and charged unreasonable premiums.
Following the ruling, Clark’s law firm, Clark & Gentry, announced that it would close its captive operations by 31 December 2017. The company had been advising and supervising micro captives since 2002.