Collins & Aikman To Use Insurance For Legal Costs

Law360, New York (March 28, 2006, 12:00 AM EST) -- Facing at least five lawsuits by shareholders who accuse current and former executives of Collins & Aikman of fraud, the struggling parts supplier company received permission Thursday from a federal bankruptcy judge to dip into its company insurance policy to pay for defense costs.

Judge Steven W. Rhodes in Detroit allowed the company’s request for its insurance company to foot the defense bill for executives named in the lawsuits.

Shareholders claimed that executives misled investors about the company’s financial health before Collins & Aikman slid into...
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