Lionsgate Entertainment has spent some $10 million defending itself against claims by Carl Icahn — but its insurance company has only reimbursed it for $2 million of that.
On Tuesday, Lionsgate and one of its directors, Mark Rachesky, sued the insurance company, Navigators Insurance, for the remaining $8 million, plus other damages, charging Navigators with "despicable" conduct.
Read the filing here.
(Icahn attempted a hostile takeover of Lionsgate, and was enmeshed in it for much of 2010. The battle included lawsuits and complaints to the British Columbia Securities Commission.)
In a lawsuit filed in L.A. County Superior Court, Lionsgate claims that "instead of honoring its duties to its insureds, Navigators undertook a campaign to escape as much liability as it believed it could."
Lionsgate bought the $10 million policy to protect itself in the case of a lawsuit, its lawyer wrote. When Carl Icahn brought several actions against Lionsgate — a lawsuit in Canada, another in New York and four at the British Columbia Securities Commission — Lionsgate figured the insurance company would pay the defense costs.
But it didn't.
"Navigators has improperly refused to reimburse Lionsgate and Rachesky for the $7,932,986.20 remaining of the Policy limits even though it acknowledges that the Policy at least provides coverage to Lionsgate for the British Columbia and the New York Actions," Lionsgate wrote.
In an email, a Navigators spokeperson wrote, "It is our policy never to comment on pending claims."
A Lionsgate spokesman also declined comment.
In court papers, Lionsgate says that the insurance company "consciously and outrageously disregarded the rights of Lionsgate and Rachesky."
It argues that Navigators should have to pay not only the approximately $8 million, but court costs and "an amount sufficient to punsih and make an example of Navigators in order to deter similar conduct."
Pamela Chelin contributed to this report.
