$150 Million Settlement Ends Six-Year Insurance Recovery Legal Battle

08.2010

After a six year legal battle, Irell & Manella LLP secured a $150 million settlement on behalf of the Flintkote Company, a manufacturer of construction and roofing materials, in a case against Aviva Insurance Company of Canada, which was filed in the U.S. District Court for the Northern District of California. This nine-figure settlement comes on the heels of another major win for the Irell & Manella insurance group, which recovered $215 million earlier this year for its client Pinnacle Entertainment, one of the largest insurance claims stemming from Hurricane Katrina.

Irell filed a complaint on behalf of Flintkote in 2004 against Aviva Insurance Company of Canada, a successor company of an insurer who issued a commercial general liability policy to Flintkote covering the years 1958 through 1960. Flintkote, which is in Chapter 11 bankruptcy proceedings, is facing hundreds of thousands of claims resulting from asbestos injuries. The Aviva policy covered $100,000 per occurrence per person, and was purchased for a premium of about $7,000. The coverage litigation before Judge Marilyn Hall Patel of the Northern District of California spawned three published opinions in the Federal Supplement, two special master referrals and much commentary in the insurance industry.

"This was hard fought litigation and we couldn’t be more pleased. The recovery will nearly double our current estate providing an additional $150 million to pay for asbestos bodily injury claims," said John Bay, Flintkote's in-house insurance counsel, who oversaw the litigation and was an integral part of the legal team. "The insurance group at Irell is comprised of some of the top lawyers in the field. Their ability to make complex issues simple was instrumental in securing victory after victory in this case. They literally won everything put before the court.”

The Irell team included Mike Fehner and Bruce Wessel, among others.

The name of the case is The Flintkote Company v. General Accident Insurance Company of Canada; et al., United States District Court for the Northern District of California, Case No. 04-01827 (MHP).