Abacus files lawsuit against Coventry over alleged defamation campaign

ORLANDO - Abacus Global Management, Inc. (NASDAQ:ABL), a life insurance asset manager with annual revenues of $134.6 million and an impressive 88% gross profit margin, has filed a lawsuit against Coventry First LLC and its Chairman Alan Buerger, accusing them of conducting a "systematic campaign" to spread false information about Abacus to manipulate market sentiment, according to a press release issued Tuesday. InvestingPro data shows the company is currently trading below its Fair Value, suggesting the market may be mispricing its shares.

The lawsuit, filed in Florida’s Ninth Circuit Court, claims Coventry and Buerger engaged in a multi-year effort to undermine Abacus by disseminating misleading statements about its valuation practices to regulators, auditors, analysts, customers, and investors.

Abacus alleges that a short report published by Morpheus Research on June 4 was the latest attack in this campaign, causing its stock to drop more than 21% and erasing over $200 million in market capitalization. According to InvestingPro data, the stock’s technical indicators suggest it’s currently in oversold territory, with shares down over 34% in the past six months. Subscribers to InvestingPro have access to 12 additional key insights about ABL’s financial health and market position.

"This isn’t about competitive practices or even good faith criticism of a competitor’s business model – they clearly crossed the line into tortious interference and defamation," said Abacus CEO Jay Jackson in the statement.

The lawsuit contends that Coventry’s central claim – that Abacus improperly values life insurance policies using Lapetus Solutions – is fundamentally flawed. Abacus maintains it uses Lapetus as only one of six life expectancy provider inputs when determining policy purchase prices, not for balance sheet valuations.

According to the filing, Buerger gave an interview on the Tegus expert network platform accusing Abacus of "manufacturing earnings" and predicting that stockholders would be "wiped out" when the company "implodes."

Abacus is seeking hundreds of millions in damages for alleged harm to its reputation, customer base, and investor relationships. The company is represented by Quinn Emanuel Urquhart & Sullivan LLP.

Coventry has faced previous regulatory issues, including bid-rigging charges from the New York Attorney General and a settlement with AIG in a fraud case, according to information included in the press release.

In other recent news, Abacus Global Management, Inc. has announced a warrant exchange offer to simplify its capital structure and reduce potential dilution. The company is offering warrant holders 0.23 shares of common stock for each warrant tendered, with the potential issuance of up to 4,743,381 new shares. Abacus has already secured agreements from holders representing a significant portion of the outstanding warrants. Additionally, Abacus held its annual meeting, re-electing directors and ratifying its independent auditor, Grant Thornton LLP, for the fiscal year ending December 31, 2025.

Piper Sandler has maintained its Overweight rating on Abacus Life, following the company’s investor day where management addressed recent short-seller allegations. The firm reiterated its confidence in Abacus’s business model and future growth prospects. In response to the short-seller claims, Abacus engaged an independent actuarial firm to validate its portfolio valuation, which confirmed the accuracy of its financials. Market analysts, including Autonomous/Bernstein and Piper Sandler, have continued to support Abacus with positive ratings.

Abacus has also initiated a $20 million share repurchase program, signaling confidence in its financial health. This buyback plan will be executed over an 18-month period and is expected to be funded through existing cash reserves and future cash flows. The company has expressed its intention to pursue legal action against those responsible for the short attack, reinforcing its commitment to transparency and accuracy in financial reporting.

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