Bankruptcy Judge Approves Legal Expenses For Furniture Brands Executives

 

Two former Furniture Brands International executives will have up to $1 million from a $15 million insurance policy to cover legal expenses as they battle shareholder lawsuits. A bankruptcy court judge approved use of the funds from a policy purchased this fall and intended to defray expenses related to lawsuits against former CEO Ralph Scozzafava and former CFO Vance Johnson.

The judge authorized American International Group Inc. and National Union Fire Insurance Co. of Pittsburgh to pay for their legal expenses, according to the ruling. The executives purchased up to $15 million in coverage before the company filed for Chapter 11 bankruptcy Sept. 9, trade publication Furniture Today reported.

In August, several shareholders filed suit against the company, alleging it failed to disclose financial information. On Nov. 25, KPS Capital Partners closed on its purchase of Furniture Brands’ assets and renamed the business Heritage Home Group.

Read more from the St. Louis Business Journal


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