10 Jul 2019

KTK Concludes a Decade of Litigation, Recovers over $2.6 Million in Settlements Against Insurance Brokers

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KTK recently secured a $1.6 million settlement on behalf of its clients, the former directors and officers of Brooke Corporation, in an insurance broker liability case. The settlement with Midwest Brokerage Services brought the total recovery to over $2.6 million for claims arising from the 2008 collapse of Brooke Corporation.

After the 2008 Brooke bankruptcy, the bankruptcy trustee filed suit against the directors and officers claiming that they acted negligently in paying dividends when Brooke was insolvent.

The executives sought insurance coverage from their respective liability insurers, with whom they had previously requested $20 million in coverage for director and officer liability insurance. The directors and officers claimed the insurance brokers both agreed and represented that $20 Million coverage had in fact been procured. However, an endorsement that was added to the policies created a $5 Million sublimit and prevented the directors and officers from accessing $15 Million in coverage. The directors and officers ultimately settled with the bankruptcy trustee and then turned to KTK to represent them in claiming their insurance broker was negligent for failing to provide adequate insurance coverage.

In 2017, KTK obtained a $1.025 million settlement from one broker, CJD and Associates. In February, 2019, KTK obtained an additional $1.6 million settlement from Midwestern Brokerage Services, reaching the agreement during trial. The settlement concluded over a decade of litigation.