California Insurance Commissioner John Garamendi filed a lawsuit against Fremont General Corp., a financial services holding company, for alleged misuse of net operating loss deductions belonging to one of its discontinued operating units.
Fremont Indemnity Co., a workers’ comp insurance company, was discontinued in 2001. The commissioner is the statutory liquidator of the unit. Garamendi filed the suit on June 2 in Los Angeles Superior Court.
On June 18, Fremont General filed with the Securities and Exchange Commission, stating that the lawsuit lacks merit. Fremont General says that the issues brought up in the lawsuit were resolved in a July 2, 2002 agreement with the California Department of Insurance. The company said that it honored the agreement and will vigorously defend itself against the lawsuit.
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