Calif. Fund Pays More than $11M in Defaulted Workers’ Comp Claims

December 14, 2001

California Department of Industrial Relations Director Stephen Smith has ordered the state’s Self Insurers’ Security Fund to take charge of payment of HomeBase Inc. and San Francisco French Bread Company workers’ compensation claims, following the bankruptcies of both companies and subsequent default on more than 600 self insured claims.

The San Francisco French Bread Company was transferred to the Self Insurers’ Security Fund on Nov. 13 after its Oct. 24 default to pay its almost 100 workers’ comp claims estimated at nearly $2 million. On Oct. 24 the company’s workers’ comp insurance carrier, Reliance, was declared insolvent by Pennsylvania and ordered to discontinue payment on the claims.

On Nov. 19, Smith ordered the Self Insurers’ Security Fund to take charge of payment of HomeBase Inc. workers’ comp liability as a result of the company’s default on its claims.

HomeBase Inc., that operates 42 House2Home home decorating superstores across California, filed a Chapter 11 bankruptcy petition Nov. 7. The company is liquidating all its stores.

HomeBase Inc. self insured its workers’ comp claims in California and presently has approximately 500 claims being handled by Gallagher Bassett.

Liabilities were estimated at around $9.1 million.

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