Insurance Law

Law Firm Sues Akin Gump and Lloyd's, Says It Was Stiffed on Stanford's $437K Defense Bill

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A law firm defending onetime Texas billionaire R. Allen Stanford in federal civil securities litigation has sued the insurer providing his company’s policy of directors and officers liability coverage and the insurer’s legal counsel, contending that they are obligated to pay a $437,151 legal bill but haven’t anted up.

Certain Underwriters at Lloyd’s of London and Akin Gump Strauss Hauer & Feld “agreed in writing” to pay the Sydow Firm to defend the former Stanford Financial Group chairman in a lawsuit brought by the Securities and Exchange Commission, contends a lawsuit filed by the Houston legal partnership on Friday in Texas state court. Although the firm received payment for its initial $76,000 in legal bills, it says it is still owed an additional $437,151, reports the Tex Parte Blog of Texas Lawyer.

Akin Gump declined to comment concerning both its own role and that of its client.

However, in addition to the SEC suit, Stanford is also facing federal criminal charges concerning an alleged $7 billion Ponzi scheme he is accused of operating under the guise of certificates of deposit issued by his offshore bank. And a federal judge in Houston last month held last month that Lloyd’s is not obligated to continue paying Stanford’s criminal defense costs under the D&O policy.

Stanford, who is jailed in Houston while awaiting trial in the criminal case, was at last report represented by a public defender, after a series of revolving-door representations by well-known law firms.

Earlier coverage: “Lloyd’s $100M D&O Policy Doesn’t Cover Stanford’s Legal Defense Bill in Ponzi Case, Judge Rules” “Battered By Months in Jail, Onetime Billionaire Stanford Says His Defense Is Suffering” “Jailed Onetime Billionaire Allen Stanford Gets Yet Another Lawyer—Alan Dershowitz” “Alleged Ponzi Schemer Tells Judge He Doesn’t Know How His Lawyers Have Billed $6M So Far”

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