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Headline: Xerox to battle insurers over policy
Source:Date: 04 Nov 034 November 2003 – Stamford (CT): Xerox has vowed to fight an attempt by its insurers to rescind a $25 million policy that it planned to use to Cover part of an SEC settlement related to alleged accounting fraud. In June, six former Xerox executives agreed to pay $22 million to settle SEC charges that they manipulated earnings to boost the firm’s share price.
Xerox must pay part of the settlement and was relying on National Fire Union Insurance, a unit of American International Group (AIG), to reimburse them.
However, the AIG unit has asked the New York Supreme Court to rescind the policy as it alleges that Xerox misrepresented its financial position while setting up the policy.
Xerox spokesman Christa Carone told opi.net: “We are quite disappointed that AIG would take such an aggressive action against a policyholder. We believe strongly that the case has no merit and that AIG is trying to avoid honouring its contractual commitments. We will vigorously defend our position in court.”
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