A federal jury has awarded Vermont’s insurance commissioner $119.9 million to distribute to creditors of the Ambassador Insurance Co., which failed more than two decades ago.
The defendants are accounting giant PricewaterhouseCoopers, which Vermont accused of negligent audits of Ambassador; and the estate of the late Arnold Chait, the Ambassador president accused by Vermont of mismanagement. A PricewaterhouseCoopers spokesman said the firm will challenge the verdict.
In 1983, Vermont seized control of Ambassador because it was insolvent. The company was incorporated in Vermont, but was based in North Bergen, N.J. Vermont filed the lawsuit in 1985, charging that Ambassador’s financial statements concealed the company’s weakness from regulators. The company was liquidated in the late 1980s after Vermont courts upheld the receivership. Because Ambassador was a surplus lines company, it lacked guaranty fund protection in case of insolvency.
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