The firm represented a high-net-worth entrepreneur and business owner who was sued on his general indemnity agreement by a surety for a construction company in which the client was a former investor. After the firm’s client was bought out of his investment, the company faced multiple lawsuits and bond claims resulting in it filing for bankruptcy. Ultimately, the surety suffered losses of approximately $1.8 million. The surety, in turn, demanded indemnification from the firm’s client under a general indemnity agreement he signed when he was an investor.
The firm’s legal hurdles were well established.
General indemnity agreements are notoriously difficult to defeat. In response to the surety’s claim, the firm took the lead in mediating lawsuits against the surety to mitigate losses which could have been substantially worse. The firm successfully defeated the surety’s attempt to attach the client’s assets. The firm pursued other indemnitors to ensure those responsible for the losses would satisfy the surety’s claim. Finally, the firm identified equitable defenses and weaknesses in the surety’s claim and convinced the surety to settle with the firm’s client for a fraction of the claim.
When all was said and done, the firm’s client paid less than 15 percent of his total original exposure.
Counsel: Jason R. Thornton and Scott M. Bennett