Pair of Chubb Group Insurers Agree to Settlement

July 15, 2002

A pair of Chubb Group insurers have agreed to pay $13.5 million to settle with Sunbeam Corp. shareholders who registered a fraud suit against the bankrupt appliance maker, according to the Associated Press. Filed five years ago, the class-action suit agreement brings the total settlement to just over $141 million.

Sunbeam and its officers were accused of inflating stock prices and allegedly providing misleading information to investors about the company’s sales and earnings.

A bankruptcy filing a year ago by the company protected it from any liability. A hearing will be held Aug. 9 to listen to objections to the most recent settlement.

Sunbeam’s accountant Arthur Andersen gave the okay to pay the bulk of $110 million last year before the Enron Corp. scandal became news.

Settlement money also includes $15 million from former CEO and chairman Al Dunlap, $13.5 million from Warren, N.J.-based Chubb’s Executive Risk Insurance Co. and Federal Insurance Co., $2 million from Cincinnati-based Great American Insurance Group, and $250,000 from former executive vice president Russell Kersh.

Both insurers reportedly wrote policies covering Sunbeam officers and directors.

None of the settlements reports of any admissions of wrongdoing.

Was this article valuable?

Here are more articles you may enjoy.