Sompo Japan Insurance Wins Billion Dollar Arbitration Award Against Fortress Re; One of the Largest Arbitration Awards Ever Rendered.Business Editors/Legal Writers NEW YORK--(BUSINESS WIRE)--Dec. 29, 2003 Cadwalader Wickersham & Taft LLP LLP - Lower Layer Protocol , attorneys for Sompo Japan Insurance Sompo Japan Insurance Inc. (株式会社損害保険ジャパン Inc., announced today that it filed papers Friday, December 19 in the United States District Court United States District Court In the U.S., any of the 94 trial courts of general jurisdiction in the federal judicial system. Each state, as well as the District of Columbia and the Commonwealth of Puerto Rico, has at least one federal district court. for the Middle District of North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. to confirm a $1.119 billion arbitration award rendered December 18 in favor of Sompo and against Fortress Re, a North Carolina reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. pool manager that prior to November 2001, had reinsured close to 40% of the worldwide airline aviation insurance market. Cadwalader Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. partner Cliff Schoenberg together with partners Howard Hawkins, John Finnegan and Philip Loree, led a team of nine additional attorneys to achieve this litigation victory for Sompo. The arbitration award, rendered in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of by a panel of three reinsurance industry experts, concluded that Fortress Re, through its principals Maurice Sabbah and Kenneth Kornfeld, had defrauded Sompo through misrepresenting pool underwriting results and by failing to disclose material facts in its accounting for financial reinsurance. The panel also held that Fortress Re fraudulently transferred hundreds of millions of dollars in dividends to Sabbah and Kornfeld, and in fictitious profits ceded to Carolina Reinsurance Company Ltd., a Bermuda reinsurance company owned by Fortress Re principals that is in liquidation proceedings in Bermuda. In its ruling, the panel awarded Sompo one billion nine million dollars ($1.009 billion) in compensatory damages A sum of money awarded in a civil action by a court to indemnify a person for the particular loss, detriment, or injury suffered as a result of the unlawful conduct of another. , the return of Sompo assets in escrow formerly held by Fortress Re in the amount of ten million six hundred thousand dollars ($10.6 million) and punitive damages and attorneys fees in the amount of one hundred million dollars ($100.0 million). The billion dollar ruling is one of the largest arbitration awards ever rendered, and constitutes the first ruling on the merits on the merits adj. referring to a judgment, decision or ruling of a court based upon the facts presented in evidence and the law applied to that evidence. A judge decides a case "on the merits" when he/she bases the decision on the fundamental issues and considers in a number of disputes between Fortress Re, its principals, and three Japanese insurance companies that invested in the Fortress Re pool. One of the other Japanese pool members filed for bankruptcy in November 2001 as a result of the losses incurred. Related litigation is pending by pool members against Deloitte & Touche, former auditors of the pool accounts and of Carolina Re. Cadwalader, Wickersham & Taft LLP, established in 1792, is one of the world's leading international law firms, with offices in New York, Charlotte, Washington and London. Cadwalader serves a diverse client base, including many of the world's top financial institutions, undertaking business in more than 50 countries in six continents. The firm offers legal expertise in project finance, securitization, structured finance, mergers and acquisitions, corporate finance, real estate, environmental, insolvency, litigation, health care, banking, insurance and reinsurance, tax, and private client matters. More information about Cadwalader can be found at www.cadwalader.com. |
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