IMAX CEO faces lawsuit from ex-wife who says insurers refused $4.5 million policy over his drinking and drug use

Linda Stein, the first wife of IMAX Corp. Chief Executive Officer Richard Gelfond, has sued him in Manhattan Supreme Court, alleging that insurers have refused to issue a $4.5 million life insurance policy on Gelfond because of his alleged “voluntary and chronic” drinking and cocaine use.

Stein, who divorced Gelfond in 2008, filed the now-sealed complaint last week seeking a court order that would require Gelfond to establish a $4.5 million trust for her benefit. She says the trust would replace an agreed-upon right to retirement-related funds that, under the divorce decree, would otherwise be available to her if Gelfond retired from IMAX.

According to the lawsuit, at least three insurance companies refused to move forward with a policy on Gelfond, 70, after underwriting inquiries that, Stein says, revealed his alcohol consumption and drug use. Stein alleges that Gelfond “knew or should have known” that his behavior would prevent her from obtaining the policy that had been contemplated as an alternative to a share of retirement funds.

Gelfond has been CEO of IMAX since 2009 and last year extended his contract with the company through Dec. 31, 2028, the complaint notes. Media reports indicate Gelfond’s compensation includes a reported $1.2 million base salary plus bonuses and stock awards. Stein, who lives on Manhattan’s Carnegie Hill, and Gelfond, who resides in the West Village and remarried in 2010, were married in 1982 and have two children.

In court papers, Stein said the divorce required Gelfond to provide her a portion of any retirement funds he might receive if he left IMAX. The complaint asserts the parties agreed Stein could instead obtain a life insurance policy on Gelfond and that he had an obligation to “cooperate” in that effort. When insurers declined to underwrite the requested coverage, Stein says Gelfond’s alleged drinking and drug use were to blame and that she has been left without the protection the divorce contemplated.

A lawyer for Gelfond, Patricia Glaser, issued a brief response to the allegations, calling them false and “without merit.” The complaint is sealed, and court filings available publicly do not include further details from either party.

IMAX, the Toronto-founded theatrical exhibition and technology company, is a publicly traded business that has grown under Gelfond’s leadership since he became CEO in 2009. The company operates large-format cinemas and sells projection systems and film formats worldwide; news reports have described the company’s market value in recent years at more than $1 billion.

The lawsuit adds to other recent legal disputes involving high-profile executives and post-divorce financial obligations, but the sealed status of Stein’s papers limits what is publicly known about the insurers’ underwriting decisions. Stein’s attorneys say insurers specifically cited Gelfond’s drinking and drug use in declining to issue the life policy; the insurers’ identities and their written underwriting rationales were not disclosed in the court filing made public.

Stein seeks to have the court compel Gelfond to fund a trust in the amount of $4.5 million for her benefit, rather than rely on the life insurance option that she says has been frustrated. The complaint frames the request as enforcement of the financial terms of the parties’ divorce agreement. Gelfond’s lawyer has denied the misconduct alleged in the suit. There has been no public comment from IMAX.

The case underscores how underwriting assessments can affect post-divorce settlements that depend on third-party insurance, and it may draw closer scrutiny of contractual language used to replace prospective retirement benefits. The Manhattan Supreme Court has not yet scheduled public hearings on Stein’s petition, and the parties did not provide additional comment beyond the filings and the denial issued by Gelfond’s counsel.