The Cash Machine

A baseball team’s television network, a retiree’s annuity, and the label that tells you they have nothing to do with each other

Registered at 1000 Elysian Park Avenue, the mailing address of Dodger Stadium, is a company called American Media Productions LLC. It owns SportsNet LA, the regional channel that carries the Los Angeles Dodgers, the one spun out of an eight-billion-dollar television deal in 2013. It was formed by Guggenheim Baseball Management, the group led by the billionaire Mark Walter that had just bought the team.

Five hundred and eighty-seven million dollars of American Media Productions’ debt sits inside two life insurance companies, Delaware Life and Clear Spring Life. Walter controls both entities and they are the largest single holdings in each. They sit on both companies’ books, in the column reserved for investments in unaffiliated third parties, that is exactly how the paper is filed: as a loan to a stranger. In the industry they call this arms-length, or not-Kuvare-length.

The stranger in this case is the owner’s baseball network, while the lender is the owner’s insurance company. The money is annuity money, retirement savings sold to people in Ohio and Indiana on a promise that it would be kept somewhere safe. A few feet away in the same filing, a second position: four million dollars of notes issued by an entity called Dodger Tickets LLC, secured by the team’s own ticket sales. Also filed unaffiliated.

For most of the last two years, nobody who was paid to notice noticed, or noticed and signed the filing anyway. Then, in February 2026, a federal grand jury in Manhattan sent both insurers a subpoena.

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THE ONLY HONEST PAGE

What the subpoena asked, in effect, was whether the companies had been telling the truth about who their money was really for.

Every life insurer files an annual statement, four or five hundred pages sworn by its officers, and buried in it is a single line, General Interrogatory 13.2, that totals the company’s investments in its own parent, subsidiaries and affiliates. In the statement Delaware Life certified at the end of February, that line came to about $1.4 billion or three percent of the portfolio. That rounding error was co-signed by KPMG.

The subpoenas, according to the companies’ own subsequent filings, concerned “whether certain private credit investments introduced to the Company and CSLAC by an affiliate should have been treated as affiliated or related-party transactions.” Delaware Life ran an internal review and in its next quarterly statement, under the heading Accounting Changes and Corrections of Errors, it delivered the result in the flat language these documents are written in: “errors were identified.”

The restated figure was not $1.4 billion. It was $16.4 billion of private credit whose returns are, in the filing’s phrase, “predominantly contingent on the performance of affiliates,” a bar the company’s auditor defines as greater than fifty percent. Counted the way the interrogatory asks, the related-party total went to $18.25 billion. Against the portfolio, thirty-nine to fifty-two percent depending on how it is sliced and 9.5x the NAIC litmit. Clear Spring’s auditor made the same move, lifting its 2024 related-party disclosure from about $1.1 billion to $8.9 billion or 15x the NAIC limit.

Nothing on the balance sheet changed except the admission. Not the admitted assets, not the surplus, not the net income, not the auditor’s opinion, which remained clean. The securities sat where they had always sat, at the same values. The only thing that moved was the answer to the question of whose performance the retirement money was actually betting on. The statutory filing reviewed by Wyandanch Consulting and Mispriced Assets shows the company’s investor presentation putting it plainly: the $16 billion had been “omitted from the Company’s 2025 Annual Statement.”

Three percent affiliated was the answer for as long as the question came from a ratings agency. Thirty-nine percent was the answer the first time it came from a grand jury, and despite that, the auditors and the executives, again, signed a clean bill of health.

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THE NAMES

To understand how sixteen billion dollars of affiliated paper wears an unaffiliated label, it helps to look at the borrowers.

Across the two insurers there are roughly two hundred and thirty holdings of a particular kind. Each is a limited liability company. Each has an invented name that sounds real and turns out to be attached to nothing:

• Verdemont Hills Financial

• Pinezanita Hills Financial

• Iroquois Collateral Issuer

• Yellow Creek Collateralized Finance

• Baumfree Corporate Finance

Together they hold something on the order of twenty billion dollars, and every one is filed unaffiliated.

Taken one at a time, an insurer lending money to two hundred and thirty separate companies is unremarkable. What is remarkable is how alike they are. Forty-four percent are held by both insurers at once, bought the same day, split into round pieces. Verdemont Hills is seventy million dollars at one sister and fifty at the other, dated together, as though a single loan had been cut in two. A third of them sit at exact five-million-dollar figures. Almost all are carried at precisely what was paid, which is to say above what they are now worth, because a mark that never moves is a mark nobody has checked. Their identification numbers are not standard CUSIPs; they carry symbols where the digits should be.

And a search of the state that formed them shows what the label leaves out. Verdemont Hills and Pinezanita Hills, records at the Delaware Division of Corporations show, were incorporated on the same day, July 3, 2024, their file numbers fifty apart, minted minutes from each other. The two insurers funded them four months later, in November. Baumfree Corporate Finance was incorporated on October 30, 2020, and funded seven days after that, alongside two other invented names, Cinque and Lilla SJ, on the same November day at the same size. These are not companies that existed and then borrowed money. They are empty vehicles created shortly before the money arrived, in batches, to receive it. Each lists the same mass registered agent, the Delaware nominee service that appears on millions of filings and keeps the name of whoever created the entity off the public record.

Whoever did create them was not choosing off a list of subdivisions. Baumfree was Sojourner Truth’s given name; Cinque led the Amistad revolt; Chisholm was the first Black woman elected to Congress. That is one run of names. Iroquois and Yellow Creek are another. Hubbard and LaSalle are Chicago streets, where Guggenheim keeps its offices. And Guggenheim’s own registered funds, the ones it must disclose to the Securities and Exchange Commission, are named the same way: Orpheus, Kennecott, Sands Point. The invisible borrowers are named in the house style of the manager, one floor below the level where the manager has to admit they exist.

None of the two hundred and thirty appears on either insurer’s organizational chart, a document that names dozens of other affiliates without hesitation. The companies have not said who owns the shells, and the nominee agent means the public record does not either. What the filings establish is the shape: purpose-built, batch-formed, round-tranched, carried at par, routed to Group 1001 accounts, and absent from the chart. Every marker of an affiliate conduit except the affiliated label the filing withholds.

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WHO MANAGES IT, AND WHO RATES IT

The manager is not hidden. Guggenheim Partners Investment Management has run the insurers’ money for years, since 2014 at Delaware Life and since 2009 at Clear Spring, which used to be called Guggenheim Life and Annuity. In the interrogatory that asks each insurer to identify its investment managers, Guggenheim is coded “U,” for unaffiliated. Under the industry’s definition that is technically true: Group 1001 does not own the manager. It does not mean the paper arrived at arm’s length. Some of it is issued by structures the insurer itself both lends to and services. On one, a set of self-managed collateralized loan obligations, the ratings agency DBRS states on the record that “the Lenders and the Servicer are affiliated entities.” Another cluster of positions traces, through control filings, to trusts once owned by Walter’s former partner Todd Boehly’s family office.

An insurer cannot simply hold twenty billion dollars of invisible loans. The paper has to be rated, so the regulators score it as safe and the capital math works. In the United States, a bond rated in the single-A range requires an insurer to set aside less than one percent of capital against it; an equity stake in a private credit fund can require thirty. The label is the difference between the two, and a rating is what fixes the label.

So who rated it. Delaware Life paid a firm called Egan-Jones Ratings $3.73 million in 2025, its filings show, up from $2.1 million the year before and under a million the year before that. Egan-Jones is the only credit rater it pays. Clear Spring’s arrangement is the same. A conventional insurer of comparable size, Equitable, pays Egan-Jones nothing and sends its ratings work to Moody’s. Egan-Jones is the small, inexpensive rater of choice for private-equity insurance money; studies have found it grades private paper roughly three notches higher than the regulators’ own analysts do. Bloomberg reported in November that Egan-Jones is itself under investigation by the SEC over improper commercial influence on its ratings, and in January the Bermuda regulator stopped recognizing it. The twenty billion dollars is investment-grade because the firm paid more each year to say so, says so.

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WHAT THE ORDINARY CUSTOMER IS HOLDING

Set the two companies side by side and the totals are these. Roughly twenty-seven billion dollars of affiliated or affiliate-linked paper across the two insurers, against about five billion dollars of combined surplus, the cushion that stands between the annuity holders and a loss. The independent tally, built up security by security from the filings, reproduces the companies’ own restated numbers almost exactly, which is the strongest thing that can be said for it: the insurers were forced to admit the figure, and it checks.

The mechanism is not confined to the asset side of the ledger. The 2014 version of this arrangement, which will be described in a moment, ran through reinsurance, the practice of ceding policy risk to another company. It still does. Delaware Life cedes to a network of affiliated and offshore reinsurers in Bermuda and Barbados, and to one entity, a captive of its own, whose treaty in the examiners’ words “does not transfer insurance risks.” Clear Spring, for its part, assumes $1.69 billion of reinsurance on a funds-withheld basis, a structure in which no cash actually changes hands, from a familiar cast that includes EquiTrust and Security Benefit. That $1.69 billion is more than one hundred forty percent of Clear Spring’s surplus. Asked on Schedule S whether its reinsurers are affiliated or controlled, Delaware Life answers no.

The academic literature has begun to catch up to what this costs. In a paper posted in July, two law professors, Andrew Granato of the University of Texas and Pranjal Drall of Yale, laid out the machinery in general terms: opacity in private credit lets an insurer “appear better capitalized than their true risk exposure warrants,” and when an affiliated fund needs to move an underperforming loan, “the insurer can become the convenient buyer.” The part few people know, they wrote, is where the losses land. When a life insurer fails, other insurers are assessed to make its annuity holders whole, and in thirty-four states those assessments are creditable, dollar for dollar, against the assessed companies’ state premium taxes. Follow that to the end, and the guarantee behind a failed carrier’s promises is not the industry. It is the state’s tax base. It is the customer, twice.

Group 1001 has said its financial condition remains strong. TWG Global, Walter’s holding company, said it is aware of and cooperating with the investigation. Guggenheim declined to comment. No one has been charged, and investigations end without charges all the time.

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THE LAST TIME

None of this is new, and that is the part worth sitting with.

In February 2014, two annuity holders sued Guggenheim Partners, Security Benefit, Guggenheim Life and Annuity and EquiTrust in federal court in Chicago. The complaint, a copy of which was reviewed by Mispriced Assets, said that Walter, Boehly and a business associate named Bobby Patton “used the Guggenheim Insurers as a cash machine to buy the most expensive sports franchise in world history, the Los Angeles Dodgers, with over a billion dollars in policyholders’ funds.” It said the affiliated paper had been hidden in the schedules “where the affiliated nature of the investment is not readily ascertained.” And it named the shell companies used to move the money: newly formed Delaware entities, labeled unaffiliated, with invented names. Eikenberry. Elmdale. Burnaby.

The forensic accountant who built that case, Tom Gober, says the case settled favorably. The docket shows only that the case was voluntarily dismissed the next day. What is not in dispute is what followed: Security Benefit and Guggenheim separated, and for the twelve years after, the examinations found nothing and the audits came back clean.

Guggenheim Life and Annuity, a defendant in that complaint, is what Clear Spring was called then. Daniel Towriss, who ran the Guggenheim insurer in 2014 while simultaneously serving as an officer of the affiliated reinsurer the case was about, runs all of Group 1001 today. Patton is still a co-owner of the Dodgers and still sits on the board of a Guggenheim-orbit insurer. The invented shell names from 2014 have all turned over, replaced by two hundred and thirty new ones. Except one — Burnaby Collateral Holdings — an $8.9 million collateral loan carried at exactly cost, is still on Delaware Life’s books, the single name to survive from the complaint into the company now under subpoena.

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The customer at the end of all this is an annuity holder, a retiree somewhere near the Indiana suburbs where Group 1001 keeps its offices, who bought a Delaware Life contract because the brochure said it was safe. She has no way of knowing that close to forty cents of every dollar in it is a bet on the performance of companies her insurer’s owner controls, or that the highest-graded paper in the pile is the television rights to a baseball team on the other side of the country. She, of course, was not told. The filing said the money was held at a distance, spread across strangers. The subpoena is the first document in the whole arrangement that turned out to be about her.

The 2014 complaint had the right phrase for it, and twelve years later it is still the right phrase. The only things that have changed are the size of the machine and the number of names on the drawers. It got quieter. It got to twenty billion dollars. And this time the people asking the questions cannot be talked out of them in an hour.

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If you are a Delaware Life or Clear Spring policyholder, a current or former employee, or you have documents relating to these entities, you can reach me at nick@wyandanch.consulting or via direct message. Confidential.

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Figures in this article are drawn from the year-end 2025 statutory annual statements and 2026 quarterly filings of Delaware Life Insurance Company and Clear Spring Life and Annuity Company, Clear Spring’s KPMG-audited 2025 statutory financials, Delaware and Kansas insurance-examination reports, the Delaware Division of Corporations, SEC-filed collateral-manager agreements and adviser records, DBRS and Bloomberg reporting on Egan-Jones, and Granato and Drall, “Private Credit’s State Backstop” (2026). Whitmore v. Guggenheim Partners was filed in the Northern District of Illinois in 2014 and voluntarily dismissed; its allegations were not adjudicated. The identification of the shell borrowers as affiliated is drawn from the pattern in the filings; their ultimate ownership is not on the public record. The Lakers and Chelsea, Walter’s other teams, do not appear in the insurers’ investment books as of these filings.