PoolRe receives $2.2m settlement from Organizational Strategies
PoolRe has received a $2.2 million settlement from defence contractor Organizational Strategies.
According to the company, Organizational Strategies made demands to improperly manipulate the pooling arrangement administered by PoolRe in 2011.
PoolRe and its captive manager, Capstone Associated Services, and other advisors considered this unlawful. This resulted in Organizational Strategies and its affiliates being excluded from the 2012 insurance pooling arrangement.
Based upon advice provided by law firm Gordon, Fournaris & Mammarella, OSI then made a claim on the pool “even though OSI was not part of the 2012 pool and had not paid premiums to the pool in 2012”, said Capstone.
PoolRe responded by seeking a declaratory judgment that it had no liability to the OSI parties.
Stewart Feldman on behalf of Capstone, explained: "Basically, the OSI parties got bad advice from both their lawyer and their CPA. The OSI parties made wild claims and took positions that were not defensible.
“At the end of the day, after paying their lawyers almost $2 million, OSI was left in an untenable position which was twice rejected in arbitration proceedings. We understand that there are serious discussions taking place with Mr Simpson and the Gordon, Fournaris law firm, as well there should be.
He added: “This is a perfect example of a law firm - here Gordon, Fournaris' Jeff Simpson - working up the client to generate litigation business for his firm.
“Unfortunately, Mr Simpson, a 'professed expert is new to the captive insurance business with his client learning the lesson the hard way. We think the Gordon, Fournaris law firm now understands that running insurance companies is a long way from drafting wills and trusts."