Judge approves $1M in coverage for former Furniture Brands execs
Thomas Russell -- Furniture Today, December 31, 2013
WILMINGTON, Del. — A bankruptcy court judge has approved up to $1 million in insurance payments to help cover defense costs for two former executives of Furniture Brands International.
U.S. Bankruptcy Judge Christopher S. Sontchi authorized American International Group and National Union Fire Insurance Company of Pittsburgh to advance the funds for future legal expenses for former FBI Chairman and CEO Ralph Scozzafava and Vance Johnston, former senior vice president and chief financial officer.
The funds are part of up to $15 million in coverage that the executives purchased prior to Furniture Brands International's Chapter 11 bankruptcy filed Sept. 9.
The policy is aimed at helping defray legal and other related costs associated with shareholder lawsuits filed in August that allege the company failed to disclose information about its true financial condition. These suits could be consolidated into a single class action complaint.
Sontchi approved the advance payment on Dec. 27.
A hearing on the authorization granting the full $15 million in coverage is scheduled for Jan 7 in U.S. Bankruptcy Court for the District of Delaware.
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