Stage Stores Claims Lloyds “Wrongfully” Discounted Its Insurance Claims
May 09, 2022, Southern District of Texas – Steven Balasiano, in his capacity as the Plan Administrator of Stage Stores, Inc. and Specialty Retailers, Inc. (“Debtors”) files a complaint against certain Underwriters at Lloyd’s, London – Brit Syndicate 2987 and Brit Syndicate 2988 et al. (“Defendants”) alleging “breach of contractual obligations” under the insurance policies.
The complaint avers that the dispute arose from the Defendants’ “wrongful” denial of, and refusal to pay, a portion of an insurance claim submitted by Stage Stores for damages to its retail stores and inventory caused by Hurricane Harvey in August 2017. It makes the claim that Insurer Defendants “incorrectly applied” a downward adjustment to Stage Stores’ claim in the amount of $2,968,149.80 when calculating the hurricane damage loss and that this reduction of Stage Store’s claims was “improper and contrary” to the express terms of the policies. The Plan Administrator contends that Defendants’ alleged refusal to pay constitutes a “breach” of the applicable insurance policies and as a result of that, Stage Stores, its post-confirmation bankruptcy estate, and its creditors have “suffered, and will continue to suffer, damages”.
The Plan Administrator seeks a declaratory judgment that the policies “do not permit” Defendants to discount the value of the inventory by any point-of-sale discounts in paying a loss. He also seeks damages resulting from Defendants’ alleged breach of the applicable insurance policies and turnover of Defendants’ respective shares of the discount amount to the Plaintiff and/or Stage Stores’ post-confirmation bankruptcy estate.
The case is Steven Balasiano, as Plan Administrator v. Certain Underwriters at Lloyd’s London, et al. (In re Stage Stores, Inc.), AP No. 22-03142, US Bankruptcy Court for the Southern District of Texas.