The opinion, issued on 22 January, 2008, denied the investment company's motion for judgment on the pleadings, a pretrial motion that alleges that the movant is entitled to relief as a matter of law, solely based upon the four corners of the pleadings filed to date.

The court followed the well-established principle that, where there is no 'Insurable Interest" in the health and safety of the person being insured, whether for family ties or business reasons, as distinguished from one where an interest would arise only upon the death of the insured, there is no valid assignment. Opinion at 13. An Insurable Interest is an interest in having the life continue.

We note that the investment company cleverly created a family trust for the insured to place his newly-purchased policy into, and then to immediately assign his beneficial interest in and to the trust to it. This maneuver, which is obviously intended to accomplish the intended purpose, transfer of policy ownership without the insurance company's knowledge, was exposed by the Court. Though perfectly legal, the borderline nature of the covert transfer of beneficial ownership, which accomplished the investment company's purpose through the "back  door,' so to speak, is a sharp practice which certainly was not looked upon favourably by the Court.  

STOLI policies are also a method through which criminals can adroitly obtain ownership of assets, and also launder the proceeds of crime, as their ownership, when accomplished through indirect means, like in this case, never comes to the attention of the insurance company until maturity occurs, and demand for payment is made.
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Research note: Life Product Clearing LLC v. Linda Angel,as Personal Representative of the Estate of Leon Lobel, Case No.: 07-civ-475 (S.D.N.Y.); 2008 WL 170193. (No F. Supp. citation available yet).