Insurer Says Banks Not Covered For $1.2M Lawsuit Over Deal

By Shawn Rice (April 13, 2021, 3:44 PM EDT) -- Everest National Insurance Co. said Monday in an Illinois federal suit that two banks aren't covered for a credit union's $1.2 million suit accusing them of fraudulent accounting practices in a purchase deal.

Everest said its insured, First Business Bancorp Co., and the insured's former subsidiary, South Central Bank N.A., can't tap into a $1 million directors and officers insurance policy to defend claims by Verve, a Credit Union. The two banks allegedly misrepresented certain information during Verve's deal to buy "substantially all of the assets" of South Central, according to the suit.

Everest claimed the banks are responsible for their...

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