WCB alleges that CRM breached contracts between Compensation Risk Managers and trusts
CRM Holdings (CRM) said that the New York State Workers’ Compensation Board (WCB) has commenced a lawsuit against it on its own behalf and in its capacity as successor in interest to the workers’ compensation group self-insurance trusts in New York previously managed by Compensation Risk Managers.
The company said that the WCB’s lawsuit, brought in Supreme Court of the State of New York, Albany County, alleges that CRM, its subsidiaries and certain directors and officers breached fiduciary duties owed to the trusts, breached contracts between Compensation Risk Managers and the trusts, breached duties of good faith and fair dealing owed to the trusts, engaged in fraudulent activities in administering the trusts, engaged in deceptive business practices and advertising, and were unjustly enriched.
In addition, WCB alleges that the WCB and the trusts have suffered damages in an amount that is not currently ascertainable, but which is believed to exceed $405m.
The company denies each and every one of the WCB’s allegations and believes that Compensation Risk Managers, provided services to the trusts it managed in compliance with its contractual obligations to the trusts and in a manner consistent with applicable law and the rules and regulations of the WCB.
The company believes that an industry-wide problem exists and that the WCB has unfairly singled the company out. It intends to defend the WCB litigation vigorously and prove that the WCB’s unsubstantiated allegations are utterly without merit.