Insurer’s Settlement of Employee Claims – Was There a Secret, Improper Deal with Plainti
A brief story in AmLaw presents an interesting synopsis of a longer article in the New Jersey Law Journal regarding Prudential insurance allegedly improperly settling claims to avoid litigation and claim disclosures prior to an IPO. In short, the issues are now in court as new plaintiff’s counsel seeks to invoke the crime-fraud exception to obtain communications regarding the prior settlement. The key excerpt from the NJ article is as follows:
"It is unheard of for an adversary to pay a contingency fee up front," he said, especially when $4 million of it is nonrefundable and the amount of the payment is laid out in a separate agreement not signed by the clients and allegedly hidden from them. Snyder made repeated references to Prudential’s conversion to a publicly traded company, which he said made it extra important to keep the claims — which included allegations of red-lining minorities — out of court and the public eye. Prudential did not go public until 2001, but in 1999, when the alleged bribe was paid, Prudential needed government approval, and bad publicity could have derailed the plans, the plaintiffs claim. "