Failed Japanese insurer Chiyoda Life is reportedly seeking damages from former Directors and Officers, alleging that their mismanagement was responsible for the company making risky investments, principally in real property, which led to catastrophic losses, and forced Chiyoda to file for bankruptcy protection.
Chiyoda, which has an agreement with American International Group to assist in its recovery, recently revealed an excess of liabilities over assets of approximately $4.5 billion, 15 times more than original estimates. The new figures have put its deal with AIG into question.
While any recovery is probably years away, and would be unlikely to substantially diminish the economic losses, the action could serve as as an incentive to other Japanese companies who have been similarly affected to pursue former management.
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