Australian casino company Crown Resorts has launched a lawsuit against RiverStone International, a leading global insurance group. The operator’s lawsuit claims that the insurer should help it cover a class-action settlement resulting from scandals that Crown was recently involved in.
RiverStone Refused to Pay
The lawsuit in question was filed in the Supreme Court of Victoria and follows RiverStone’s refusal to pay under excess insurance policies that Crown believes cover the class-action settlement.
For reference, the settlement stems from a 2020 lawsuit that discovered potential AML deficiencies and lack of transparency in relation to Crown’s junket and VIP program. Although the casino operator did not admit liability, it eventually agreed to pay AUD 72.5 million ($51 million) to close the matter.
Crown was not unprepared either, as it had secured multiple insurances to shield itself from legal claims. Some of these were, in fact, paid, with AIG, Crown’s primary insurer, paying AUD 7.5 million, per the terms of the agreement.
However, RiverStone, which held 50% of the risk outlined in Crown Resorts’ 4th and 5th layer excess policies, did not pay. This led Crown Resorts to launch its lawsuit against the insurer.
Crown Resorts Seeks to Recover the Payment Plus Interest
According to a report by the Sydney Morning Herald, Crown Resorts claims that RiverStone instructed it to act as if it were uninsured while negotiating the $51 million settlement. However, the news outlet was unable to determine the reason for this.
In any case, Crown is now seeking payment plus interest. The court documents, however, do not make the sum Crown Resorts expects clear.
Recovering these funds would provide Crown with some financial relief following a difficult period for the company. In addition to the pricey settlement, the scandals it was involved in have taken a significant toll on its shares. Crown’s shares, however, stopped being publicly traded after Blackstone acquired the company in 2022.
As for the settlement itself, Crown has agreed to pay the $51 million in three installments. Two of these have already been paid, with a final one (AUD 27.5 million/$19.2 million) due by May 10 next year.
In other news, Crown recently found itself in hot water after its Crown Sydney Casino in New South Wales had to pay a fine of AUD 1.75 million ($1.25 million) after the New South Wales Independent Casino Commission (NICC) ruled that the property had allowed a minor to gamble at least 19 times.