Stanford Exec Sues Insurer, Can't Afford a Defense

Stanford Exec Sues Insurer, Can't Afford a Defense - 3-19-2009 , Class Action News, Class Action, Securities News, shareholder class action, claim, litigation, securities action, common stock'>

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Stanford Exec Sues Insurer, Can't Afford a Defense
Zach Lowe

The American Lawyer. March 19, 2009
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EXCERPT: The alleged $8 billion Stanford Financial fraud has produced some strange legal story ideas, ranging from ethical debates about an attorney's loyalty to questions about why two of the principal defendants involved still haven't hired lawyers more than a month after the federal government hit them with civil charges. Through it all, sources have told us R. Allen Stanford and his top lieutenant, James Davis, may simply not have the cash -- their assets are frozen, after all --to hire a top legal defense team, and that they may wait until the government files criminal charges against them (when they would be guaranteed court-appointed counsel). Now we've learned that Laura Pendergest-Holt, the one Stanford defendant in the SEC's civil fraud case who does have a lawyer, can't afford her legal team. Pendergest-Holt filed a suit late Tuesday in state trial court in Texas (available below) against Lloyd's of London, claiming the Stanford Financial insurance policy with Lloyd's requires the insurer to foot the bill for her legal defense. The suit, filed by Pendergest-Holt's team at the Salt Lake City-based firm Parsons Behle & Latimer and local counsel from Sawicki & Lauten in Dallas, asks for $10 million in actual damages and $40 million in punitives. Pendergest-Holt's assets are frozen, and "there is a substantial risk" that without help from Lloyd's, she will be unable to defend herself against civil and criminal charges, the suit says.

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