Defendant Insurance Companies Face Lawsuits Seeking Performance of Insurance Policies; $10 Million Insurance Cover Under Policies
March 23, 2022, New York – Plaintiff Debtor 96 Wythe Acquision LLC has filed a lawsuit against Defendants State National Insurance Company (SNIC), RLI Insurance Company (RLI), and five (5) others seeking the performance of Insurance Contracts between the Debtor and the Defendants. The Debtor seeks a declaration that the Defendants SNIC and RLI are obligated to provide insurance coverage, including indemnity coverage, for any liability imposed against the Debtor in state court actions for bodily injury and property damage stemming from the construction of a hotel building of the Debtor. The State court actions for liability and damages against the Debtor in the amount of about $16 million. The SNIC insurance policy has a limit of $1 million, and the RLI policy has a limit of $10 million. As per the Plaintiff’s Complaint, the SNIC and RLI allegedly “refused to provide coverage to the Plaintiff” under the state court actions.
On February 23, 2021, the Debtor filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code, initiating the bankruptcy case. The Debtor continues to be in control of its assets. The Case is filed in the Bankruptcy Court for the Southern District of New York. The Bankruptcy Case No. is 21-22108 (RDD).