(MENAFN- PR Newswire) Brief argues reversing lower court's decision would position Texas as hostile to business
DALLAS, Oct. 30, 2023 /PRNewswire/ -- Gravely PC has filed an amicus brief on behalf of the Dallas Regional Chamber, calling on the Texas Supreme Court to uphold a lower court's decision in a $220 million insurance dispute and saying that reversal would adversely impact companies across the state.
The brief was filed in conjunction with In Re Illinois National Insurance Co., Et Al., a case in which the Texas Supreme Court has been asked to decide a third-party standing question involving Illinois National Insurance and two companies – Cobalt Energy and GAMCO Global Gold – trying to collect on a $220 million claim.
The dispute originated in 2013, when GAMCO Global Gold sued Cobalt Internal Energy Inc. for securities fraud. When Cobalt filed for bankruptcy in 2017, Cobalt and GAMCO negotiated a $220 million non-recourse settlement agreement, which was approved by a bankruptcy court and a U.S. District Court. Under the terms of the settlement, Cobalt and GAMCO then sued Illinois National in state court for the settlement amount.
After the state court sided with Cobalt and GAMCO and the Fourteenth Court of Appeals denied Illinois National's appeal, the insurance company is now asking the Texas Supreme Court to reverse the lower court's decision. It is contesting the validity of the court-approved settlement, asserting that it gives standing to GAMCO, a non-insured, third-party judgment creditor.
It also asserts that because the settlement agreement removed financial liability from the company's officers and directors, the insurance policies at issue provide no coverage because there was no defined loss.
The Dallas Regional Chamber's brief argues that the issues presented by Illinois National Insurance "threaten to jeopardize the reliance individual board members and corporations reasonably place on both directors and officers (D&O) insurance and settlements to mitigate and avoid risk."
"This is an insurance coverage issue that could negatively impact any Texas company," said Gravely PC founder Marc Gravely . "If a company leader would be required to pay the cost of litigation before there is a loss that triggers coverage, that essentially eliminates the benefit of insurance."
The brief also argues that ruling in favor of Illinois National would position Texas as a jurisdiction hostile to business and would keep qualified individuals off Texas boards.
The Dallas Regional Chamber is one of America's most established business organizations and serves as the voice of business and the champion of economic development and growth in the Dallas region. It is made up of more than 700 member companies representing approximately 600,000 employees in North Texas.
Read the full amicus brief here .
Gravely PC has developed a national reputation based on record outcomes in large and complex construction defect litigation and first-party and bad-faith insurance disputes. The firm's veteran litigators are trusted advisers to commercial property owners, boards and governmental entities in disputes involving general contractors, design professionals and insurance companies. The firm pioneered the use of the contingent-fee litigation model for construction defect disputes and is known for its high degree of expertise in complex engineering, scientific and technical issues at the heart of these disputes. Visit: .
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