Judge says insurer must pay D&O defence costs
US District Judge David Hittner has ordered Lloyd's to pay for alleged swindler Allen Stanford's defence, Reuters reports.
Lloyd's stopped providing coverage last year under a directors and officers policy, using a money laundering exclusion.
"Without access to the funds for which plaintiffs duly contracted, through the Stanford entities, and upon which they relied, the court finds plaintiffs will be unable to mount the defence required in such complex cases as the criminal action and the SEC action," the judge said in a 42-page order.
Lloyd's must pay all costs and expenses that have been submitted within 10 days, the order said.
Lloyd’s must advance funds
Bloomberg added: “The court has determined that the plaintiffs have a substantial likelihood of succeeding on their claim that the policies require underwriters to advance defence funds until a final judicial determination is made on the underlying litigation,” Hittner said in the ruling.
The Lloyd’s underwriters had denied coverage in November, saying the policy was voided by the August guilty plea of James Davis, who had been chief financial officer for Stanford Financial.
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