City of Los Angeles In Re Municipal Bond Insurance Litigations
Published: Aug. 18, 2017 | Result Date: Jun. 13, 2017 |Case number: CJC-08-004555 Settlement – $939,403
Judge
Court
San Francisco County Superior Court
Attorneys
Plaintiff
Joseph W. Cotchett Jr.
(Cotchett, Pitre & McCarthy LLP)
Nanci E. Nishimura
(Cotchett, Pitre & McCarthy LLP)
Defendant
James A. Murphy
(Murphy, Pearson, Bradley & Feeney)
for AMBAC
John Girarde
(Murphy, Pearson, Bradley & Feeney PC)
for AMBAC
Robert P. LoBue
(Patterson, Belknap, Webb & Tyler LLP)
Jonathan Hatch
(Patterson, Belknap, Webb & Tyler LLP)
Facts
The City of Los Angeles filed suit against several bond insurers, including Ambac Assurance Corp., regarding the insurer's risk-assessing practices. The entities were involved in the sale of city-issued bonds.
Contentions
PLAINTIFF'S CONTENTIONS: Plaintiff claimed defendants manipulated the price of bond insurance through an anti-competitive dual credit rating system that plaintiffs alleged unfairly assigned public and non-profit entities lower ratings than corporate entities with equivalent risks of default. Plaintiff claimed this artificially inflated the cost of bond insurance sold to plaintiff, which cost plaintiff millions of dollars in premiums.
DEFENDANTS' CONTENTIONS: Defendant Ambac denied the allegations and asserted various affirmative defenses.
Result
The city agreed to settle with Ambac in the amount of $939,403.
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