On Thursday, a three-judge panel of Fifth Circuit judges heard oral argument regarding the insurance coverage dispute concerning R. Allen Stanford and three other Stanford Financial Group employees. The dispute involves the advancement of defense costs to Stanford Financial directors and officers.
The Texas Lawyer reports that certain underwriters want the panel to overturn a decision made by U.S. District Judge David Hittner, in which Hittner issued a preliminary injunction that orders underwriters at Lloyd’s of London and Arch Specialty Insurance Co. to advance defense costs to the four former Stanford Financial executives who have a civil suit and criminal charges pending against them.
According to the Texas Lawyer, the underwriters argued that they should not have to pay under the company’s directors-and-officers policy because the defendants allegedly engaged in money laundering. The panel reportedly focused on who had the right to decide whether the money laundering exclusion applied to the defendants.
