From Home Furnishing Business
Furniture Brands Execs Want Insurance Money for Legal Costs
The former Furniture Brands CEO and CFO are requesting funds from a $15 million insurance policy to cover the costs of ongoing shareholder lawsuits.
Two former Furniture Brands executives are asking a bankruptcy judge for permission to spend funds from a $15 million insurance policy on legal costs as they continue to battle several shareholder lawsuits.
An attorney for former CEO Ralph Scozzafava and former Chief Financial Officer Vance Johnston asked the judge for permission to spend the insurance funds in a request filed in U.S. Bankruptcy Court in Wilmington, Del., the Wall Street Journal reports. The insurance policy should cover losses "arising from any securities claims" against the company, the lawyer argued.
Before Furniture Brands filed for bankruptcy in September, several shareholders sued Scozzafava and Johnston, alleging that they made positive statements that didn't accurately reflect the problems within the company's wholesale business and other liquidity issues, according to one of the lawsuits.
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Source: St. Louis Business Journal