Vermont’s $182.9 Million Judgment on Behalf of Claimants and Creditors of Ambassador Insurance Co. Upheld on Appeal

first_imgVermont’s $182.9 Million Judgment on Behalf of Claimants and Creditors of Ambassador Insurance Co. Upheld on AppealMontpelier, Vermont –(September 10, 2008) The U.S. Third Circuit Court of Appeals issued an opinion yesterday upholding a judgment of $182.9 million against PriceWaterhouseCoopers in favor of the courtappointed Receiver for Ambassador Insurance Co., Paulette J. Thabault, Commissioner of the Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA). Ambassador Insurance Co. (a Vermont domiciled surplus lines insurance company with headquarters in New Jersey) was seized in 1983 and placed into court-supervised rehabilitation and subsequent liquidation as a result of its insolvency. Since that time, the principal obligation of the Commissioner as Receiver has been to collect and distribute assets under court supervision in order to pay the rightful claims of persons insured and owed money by Ambassador.In the accounting malpractice lawsuit filed in 1985 against PriceWaterhouseCoopers, Ambassador’s outside accountants were charged with negligence in connection with audits of Ambassador’s financial statements that served to conceal from regulators the insurance company’s financial weakness and near insolvency. A nine week trial in federal court in Newark, NJ, resulted in a jury verdict against Defendants PriceWaterhouseCoopers and the estate of Arnold Chait, Ambassador’s former President.Yesterday’s opinion upholds the 2005 verdict and PriceWaterhouseCooper’s obligation to pay all of the resultant damages, and confirms judgment for the full $182.9 million. Commissioner Thabault is pleased with the result and considers the outcome to be another success for state-based regulation of insurance companies, noting that Ambassador policyholders and claimants will finally have the opportunity to receive the insurance proceeds they were due under Ambassador insurance policies as a result of these proceedings. “It’s been a lengthy process, to say the least, and I am gratified that the Court upheld the jury verdict and the District Court judgment,” Thabault said. “As a Department, we’re committed to protecting the interests of policyholders, and pleased that the years of work in connection with these receivership proceedings should allow us to make full payment to all policyholders,” Thabault said.last_img

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