A federal appeals court in New Orleans ruled Monday that Lloyd’s of London underwriters must, at least for now, pay lawyers defending indicted Texas financier R. Allen Stanford and three other former Stanford executives. The court rejected the London-based insurers’ argument that it could void the directors’ and officers’ insurance coverage on the basis of Stanford Group Co.’s former CFO’s guilty plea to three felony counts last year and the court-appointed receiver’s claim that the business was a Ponzi scheme.
The three-judge panel ordered Lloyd’s to continue paying Stanford’s lawyers until a lower court can formally decide the matter.
On Nov. 16, 2009, the underwriters by letter advised Stanford executives that they would no longer provide coverage under the directors’ and officers’ policy because they had determined, based on the evidence available to them up to that point, that money laundering, as defined by the policy, had occurred. The appeals court, however, noted that although notice to the executives of this determination came in November, the underwriters denied coverage as of Aug. 27, 2009 — the date of CFO James Davis’s guilty plea. “The underwriters contend that each allegation against the executives in the SEC and criminal actions ‘aris[es] directly or indirectly as a result of or in connection with any act . . . of Money Laundering,’” U.S. Appeals Court Judge Patrick E. Higginbotham wrote in the ruling posted on the New Orleans court’s Web site. “The underwriters urge this reading of the policy even though only one of twenty-one counts charged in the criminal action alleges money laundering as defined by law. In doing so, they rely on the policy’s definition of Money Laundering, which is defined to cover much broader conduct than the violation of a money laundering statute.”
The court said its focus has been on the underwriters’ obligation to reimburse defense costs, but the D&O policy also imposes an obligation on the executives to repay those costs if it is determined that they committed acts in connection with money laundering.
“The underwriters are contractually bound to reimburse reasonable defense costs until that merits decision is reached,” Higginbotham wrote. “This conclusion in no way controls the ultimate coverage decision.”
MAY 21 Gambit columnist Clancy DuBos writes about the Mother's Day shooting, and how the stages of shock and blame and healing mirror those traveled by the same city following Hurricane Katrina. The city will recover, just as it did following the storm, by reaching out to help the people injured most seriously by the event, DuBos writes. It's how we heal, he says.
MAY 21 Here's a post on the Advocate (but buried on a subpage, not on the front) that reports something Louisiana Voice reported some time ago: a top DOE official lives in Los Angeles and "commutes" to Baton Rouge. The positioning of the story caused a stir on Facebook Monday, with several posters asking if the Advocate was covering someone's hiney. Sentell's stories on DOE are notoriously soft, and this one is no different: don't expect any hard questions in here.
MAY 21 Here's another post from blogger Tom Aswell about the "course choice" program. He's already reported on kids being signed up without their consent or knowledge, and has more here: For example, he tells of a six-year-old who was signed up for high school Latin. He also digs a little deeper into the sister companies of the main one operating in Louisiana; all of them seem to have complaints against them. Stinky.
MAY 21 Given the 80 percent cut in higher ed funding since he's been in office, it's clear Gov. Jindal would rather give tax cuts to out of state companies than have a functioning system, blogger Dayne Sherman argues in this post. The cuts have been such a disaster, Sherman says, that it will take 30 years to fix what's been broken. He says he believes the aim is to shut down most of the schools before Jindal leaves in 2016.
MAY 21 Blogger CB Forgotston says there are too many elections in Louisiana, and they're costing us too much money. The proof is in the pudding: turnout for most of these nonsensical pollings gets worse and worse, CB opines, even as millions of dollars that could be spent on health care or higher ed go down the tubes. The legislature must take action to stem the tide of pointless elections, he says.
MAY 21 Here's an interesting investigative piece by WVUE on the retirement benefits of some Jefferson Parish public employees. According to the story, the taxpayers are paying 100 percent of the retirement contributions of employees who started work prior to a certain date in April 1986 -- and have done for more than 30 years. It costs the parish millions annually, and might not be legal, the story reports.
MAY 21 This post on Bayou Buzz provides insight from Louisiana's intrepid pollster, Bernie Pinsonat, on the winners and losers from this year's legislative session. But to hear Bernie tell it, there's almost nuttin but losers: Jindal, the Republican party, the Fiscal Hawks all get big goose eggs in his win column.
MAY 20 This post on The Lens takes a look at a huge (either $500K or $250K) bill that one NOLA charter now has for school lunches. The RSD says the charter group didn't fill out the proper paperwork for federal reimbursement, but the story details how the RSD didn't ensure the people running the charter had the proper training, despite requests from hapless charter employees trying to fill out forms. Either way, somebody's asleep at the wheel.
David Calhoun and Elizabeth “EB” Brooks are the first two employees of Lafayette Central Park Inc., the nonprofit charged with turning Lafayette Consolidated Government’s 100-acre Johnston Street Horse Farm property into a passive public park. Calhoun was named executive director, and Brooks is director of planning and design.
There will soon be a whole lot of shakin’ going on at Benny’s Sportshack Supplement Depot, a new concept by Opelousas native Benny Nele. Located at 2002 Johnston St., the supplement shop, smoothie bar and café, featuring hot off the press paninis and wraps, plans to open in late May.