This is the property of the Daily Journal Corporation and fully protected by copyright. It is made available only to Daily Journal subscribers for personal or collaborative purposes and may not be distributed, reproduced, modified, stored or transferred without written permission. Please click "Reprint" to order presentation-ready copies to distribute to clients or use in commercial marketing materials or for permission to post on a website. and copyright (showing year of publication) at the bottom.

Insurance
Unfair Business Practices
City-Issued Bonds

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

Curtis E.A. Karnow

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.


#127886

For reprint rights or to order a copy of your photo:

Email jeremy@reprintpros.com for prices.
Direct dial: 949-702-5390