US Fire Wins Coverage Battle Over Fake Madoff Profits

Law360, New York (June 22, 2011, 8:14 PM EDT) -- A New York judge ruled on Wednesday that two investment vehicles could not receive insurance coverage for fake profits they lost in Bernard L. Madoff’s massive Ponzi scheme, which they sought from U.S. Fire Insurance Co.

Judge Richard B. Lowe mostly denied motions for summary judgment on both sides of the dispute, but ruled that U.S. Fire could not be liable for more than the out-of-pocket losses incurred by two investment vehicles managed by Nine Thirty Capital Management LLC.

At the time the fraud was discovered,...
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