CGU wins legal stoush over $20 million D&O policy
CGU has won the latest round of a legal stoush over a $20 million D&O policy relating to collapsed phone company One.Tel.
The NSW Supreme Court has ruled a trustee for former One.Tel chairman John Greaves can no longer continue with legal action against CGU.
In 2004, Mr Greaves agreed to pay $20 million to One.Tel creditors and a $350,000 fine to the Australian Securities and Investments Commission (ASIC). He also received a four-year directorship ban.
Two months after the settlement, Mr Greaves entered bankruptcy. His assigned trustee, David Watson, pursued a D&O claim against CGU in an attempt to recover funds for One.Tel creditors.
A CGU spokesman welcomed the Supreme Court decision but told insuranceNEWS.com.au the policy could be subject to further legal action.
“Our position has always been that the One.Tel directors’ and officers’ insurance policy ceased to exist because of issues of significant non-disclosure, and therefore there was never a valid claim,” she told insuranceNEWS.com.au.
“This matter is the subject of ongoing litigation. Nevertheless we are pleased with the outcome of this recent ruling which relates specifically to the claim by the trustee of Mr Greaves’ creditors.”
The NSW Supreme Court has ruled a trustee for former One.Tel chairman John Greaves can no longer continue with legal action against CGU.
In 2004, Mr Greaves agreed to pay $20 million to One.Tel creditors and a $350,000 fine to the Australian Securities and Investments Commission (ASIC). He also received a four-year directorship ban.
Two months after the settlement, Mr Greaves entered bankruptcy. His assigned trustee, David Watson, pursued a D&O claim against CGU in an attempt to recover funds for One.Tel creditors.
A CGU spokesman welcomed the Supreme Court decision but told insuranceNEWS.com.au the policy could be subject to further legal action.
“Our position has always been that the One.Tel directors’ and officers’ insurance policy ceased to exist because of issues of significant non-disclosure, and therefore there was never a valid claim,” she told insuranceNEWS.com.au.
“This matter is the subject of ongoing litigation. Nevertheless we are pleased with the outcome of this recent ruling which relates specifically to the claim by the trustee of Mr Greaves’ creditors.”