MIAMI — Westlaw Journal Bank & Lender Liability reported on Rivero Mestre’s representation of Westernbank’s officers and directors in their suit with the Federal Deposit Insurance Corporation.
A federal judge in Puerto Rico has ruled that an “insured vs. insured” exclusion in the D&O insurance policy of the failed Westernbank does not bar coverage for government regulators’ charges that its former directors’ reckless loan practices led to its collapse.
• Holding Co. et al. v. AIG Insurance Co. et al., No. 11-2271, 2014 WL 3378671 (D.P.R. July 9, 2014). The ruling by U.S. District Judge Gustavo A. Gelpi of the District of Puerto Rico appeared to be a double setback for the insurers that wrote D&O policies for W Holding Co., parent of the now-defunct Westernbank Puerto Rico, one of many banks taken over by the Federal Deposit Insurance Corp. after the 2008 financial crisis.
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In response to AIG’s argument that in the final analysis, the FDIC “stands in the shoes of” the owner, Judge Gelpi wrote, “The FDIC is not suing on behalf of an ‘insured’ or an ‘organization.’ It thus does not run afoul of the exclusion.”
Click here to see the D&Os’ motion to clarify the court’s advancement order, the reply in support of the motion to clarify, the response to AIG’s motion for summary judgment relating to the insured v. insured exclusion and the order.
About Rivero Mestre LLP
Rivero Mestre, from its offices in Miami and New York, represents clients from investigation to verdict and appeal in complex business disputes in U.S. federal courts, state courts, and domestic and international arbitration proceedings. The firm’s practice focuses primarily on representing corporate and institutional clients in a broad range of complex commercial disputes including financial institution matters, intellectual property disputes, and litigation and arbitration relating to Latin American trade and investment. For more information, visit www.riveromestre.com.