A Franklin County Common Pleas judge last week approved a $18.75 million settlement in a case stemming from the 1998 failure of PIE Mutual Insurance, Ohio’s largest medical-malpractice insurer. State regulators shut PIE down in 1998, at which time the company’s liabilities exceeded its assets by approximately $275 million.
Without admitting guilt, two firms agreed to pay the state a total of $18.75 million.
The Cleveland-based law firm of Benesch Friedlander Copland & Aronoff will pay the $8.75 million to settle allegations it engaged in legal malpractice in its dealings with PIE, and the accounting firm KPMG Peat Marwick will pay $10 million to settle allegations it didn’t provide proper oversight of PIE’s financial statements. In an attempt to raise money on behalf of PIE’s creditors, a lawsuit against the two firms was filed in 1998 by state insurance liquidators, who have raised $220 million through the sale of PIE assets and lawsuits against former PIE executives, directors and employees.
According to the Ohio Department of Insurance, the more than 28,000 malpractice claims against PIE-insured doctors could reach $800 million.
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