A federal judge ruled that a unit of insurer Crum & Forster Inc. is liable only for covering $17 million in losses at a failed Louisiana bank, shaving $12 million off a December jury verdict against the firm. Crum & Forster is a unit of Xerox Corp.
The case involved claims brought by the Federal Deposit Insurance Corp. against the former officers and directors of the failed Bank of Commerce of Shreveport, La. A federal jury found in December that the officers and directors were grossly negligent in approving $29 million in loans that weren't repaid.
The insurance carrier for the bank, International Insurance Co., a unit of Crum & Forster, Basking Ridge, N.J., contended that it wasn't liable for covering the losses. The insurer's outside counsel said the company instructed him to decline to comment, and company spokesmen could not be reached.