21 January 2011

Meijer seeks settlement with insurance providers

After a court battle that revealed some of Meijer's secret payouts to Acme government officials, the Grand Rapids-based retailer has settled a lawsuit with its insurance providers.

Meijer solidified a settlement with American Home Assurance Co. out of New York - a company that sued in the summer of 2010. American Home Assurance said it was not responsible for more than $2.2 million of the $4.4 million in payments Meijer made to Acme officials that derived the retailer's illegal campaigning in Acme.

Insurance lawyers from both sides told the court judge that they need 30 days to finalize a mediation deal. The attorneys also declined to comment on any specifics of the settlement.

"The settlement is about as confidential as it can get" said one Oklahoma City insurance lawyer who has been tracking Meijer's legal issues from the beginning.

Last year, Meijer's top lawyers had mistakenly revealed the settlement amounts paid to Acme officials. The exposed legal documents revealed that Meijer paid the former Acme treasurer $2 million and another Acme supervisor $700,000.

New York's American Home argued that it was not responsible to pay for Meijer's public, $1.5 million settlement with five Acme commissioners and trustees because the retailer publicized "known false information" about the officials, failed to offer information about the lawsuit, and did not utilize it underlying coverage held by another entity.

As a response, Meijer counter-sued American Home Assurance as well as its insurance broker (Marsh U.S.A. Inc.)

"Meijer's legal disputes are panning out to be an interesting turn of events" said a Tucson insurance defense lawyer who is following the case.

The insurance claim dispute effectively resolved two lengthy mysteries in Meijer-Acme story: the 2007 legal settlement with the former Acme treasurer and the subsequent unannounced deal with the Acme supervisor.

Meijer later paid out $190,000 due to civil fines for violating State campaign finance regulations. The county prosecuting attorney awaits a state Supreme Court decision to see if he can prosecute unidentified individuals at Meijer who allowed the illegal activity.

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