A unit of French insurer AXA has sued an arm of Dutch insurer ING in New York state court, alleging ING misrepresented the financial health of a Mexican insurance company it sold to AXA in 2008.
AXA said it has suffered potentially hundreds of millions of dollars in damages from the $1.5 billion deal, which closed in July 2008. The suit was filed Friday.
The dispute centers on a bond company called ING Fianzas that was included in the sale of the insurance business, Seguros ING.
AXA alleges the bond company was in worse financial condition than ING said, with the collateral backing bonds it sold either too limited or non-existent.
AXA additionally claimed it overpaid for Fianzas, citing the $2.74 million it sold the bond unit for this year and the valuation of up to $162 million ING provided.
There is also evidence, AXA claimed, that ING’s misrepresentations were intentional, which would eliminate the cap on damages the two sides agreed to in the original 2008 transaction.
An ING spokesman declined to comment, saying the company does not comment on pending legal disputes.
AXA disclosed in the suit that it filed a claim with ING for its losses in July 2009, which ING rejected in October 2009. The two sides have been negotiating since, AXA said.
The case is AXA Mediterranean Holding v ING Insurance International, New York State Supreme Court, County of New York No. 652110/2010.
(Reporting by Ben Berkowitz, additional reporting by Grant McCool in New York and Marcel Michelson in Amsterdam, editing by Dave Zimmerman)