Orion HealthCorp Trustee Demands $18M From Allied World National Assurance as Alleged Damages In an Insurance Coverage Dispute
December 20, 2021, Eastern District of New York – Trustee Howard M. Ehrenberg for the jointly administered bankruptcy estates of Orion HealthCorp, Inc. and Constellation Healthcare Technologies, Inc., brings a lawsuit against Allied World National Assurance Co., seeking damages and declaratory judgment concerning the alleged “breach of the insurance contract” between the parties.
As alleged in the complaint filed with the Court, Allied World allegedly issued an excess insurance policy to Orion and Constellation that followed from a primary level insurance policy. The complaint further argues that under a “follow form” excess policy, Allied World allegedly agreed to insure the directors and officers against losses for claims covered under the primary policy where the losses exceeded the primary policy’s limits.
In the complaint, Ehrenberg claims that Allied World allegedly refused to participate in the defense and settlement of claims against Orion & Constellation’s former directors and officers in “breach” of the insurance policy’s terms and the covenant of good faith and fair dealing. Accordingly, Ehrenberg seeks a judicial determination holding that the directors and officers allegedly incurred an “insured loss” of $18,500,000 under the policy terms.
In re Orion Healthcorp, Inc., Case No. 18-71748 (AST)