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Member, Beacon International Group, Ltd.
TORONTOAmerican International Group Inc. and Chubb Corp. may pay a total of $50 million to settle a lawsuit against former directors of Hollinger International Inc. and leave Hollinger's excess insurers potentially responsible for covering all future claims against the directors, an Ontario Superior Court judge has ruled.
The settlement, which would exhaust the limits written by New York-based AIG and Warren, N.J.-based Chubb, would resolve the claim that minority shareholder Cardinal Capital Management L.L.C. of Greenwich, Conn., made against Chicago-based Hollinger, which publishes the Chicago Sun-Times daily newspaper. Cardinal claimed that the former directors ignored the alleged financial misconduct of former Hollinger Chief Executive Conrad Black.
Other lawsuits over Mr. Black's alleged financial misconduct are pending against Hollinger, a unit of Toronto-based Hollinger Inc. The settlement would force Hollinger to seek coverage for those claims from its excess insurers. Those insurers--ACE Ltd., Zurich Insurance Co. and Royal Insurance P.L.C.--opposed the $50 million settlement.
The settlement, though, still must be approved by a judge in Delaware, where Cardinal's lawsuit was filed.