Insurers Lose Bid to Rescind Milberg Liability Coverage
A Manhattan federal judge has ruled three insurers can’t seek to rescind liability coverage for the Milberg law firm because they filed suit too late.
Three insurers had sued Milberg nd four former partners in August 2008 in an effort to recover $4.8 million paid for defense costs and claims, Business Insurance reports. The plaintiffs claim the firm had made false statements on its insurance application that asserted it was unaware of any circumstances that could result in a claim.
U.S. District Judge Loretta Preska ruled Wednesday that the insurers’ suit was not brought within the six-year limitations period for actions alleging fraud in the inducement, according to Business Insurance.
The Milberg firm and the four former partners named in the insurers’ suit were accused of conspiring to pay kickbacks to lead plaintiffs in securities class actions. The firm agreed to pay $75 million in exchange for dropped charges, while the four lawyers pleaded guilty, including firm founder Melvyn Weiss.
The insurers that filed suit were Lloyd’s of London syndicates, Zurich Specialties London Ltd., and Illinois Union Insurance Co., the story says.
