Former Hawks ownership sues insurance company over Ferry settlement

The Atlanta Hawks Basketball and Entertainment LLC, the former ownership group of the NBA franchise, has filed a lawsuit against New Hampshire Insurance Company for breach of contract involving the settlement of claims made by former general manager Danny Ferry.

The former Hawks ownership group (AHBE) included controlling parter Bruce Levenson. The lawsuit does not involve the current Hawks ownership group led by principal owner Tony Ressler.

The lawsuit, filed in the Superior Court of Fulton County on Sept. 13 against the insurance company also described as AIG, is a civil action for breach of contract and insurance bad faith. AHBE claims it was insured under a policy for coverage for certain losses related to employment practices, including, but not limited to, certain acts of “Wrongful Termination”’ and “Workplace Torts.” According to court documents, AHBE gave notice to AIG on April 2, 2015 that claims had been asserted by Ferry that it believed were covered.

Ferry and Hawks ownership reached an undisclosed buyout agreement on June 22, 2015 ending the relationship that began with a six-year, $18 million contract in 2012. The approval of the sale of the franchise to the Ressler-led group came two days later.

According to a spokesperson for current Hawks ownership: “We are aware of the complaint. The principal parties involved no longer have ties to the Atlanta Hawks organization and we will have no further comment on this matter.”

According to court documents the amount of the claim in confidential. The lawsuit states that the confidential limits of liability of the policy are sufficient to play AHBE’s claim. The lawsuit states that AIG has refused to acknowledge that a claim was made and refused to acknowledge that the policy has been triggered. It also states that AIG “steadfastly refused to participate in the defense of said claims or accept coverage” during discussions between the Hawks and Ferry’s counsel. The lawsuit claims a breach of contract for failure to pay covered losses in the settlement.

According to the lawsuit: “Despite an obligation to pay and the acknowledgement that certain of Mr. Ferry’s claims triggered the AIG Policy, as well as the fact that these claims clearly fell within the policy coverage, AIG has failed and refused to pay the covered loss without significant justification and in bad faith. AIG had no reasonable basis to contend that a claim had not been made and that such claim was not covered.”

“The complaint speaks for itself,” said James J. Leonard of Barnes & Thornburg LLP, the firm representing AHBE. He declined further comment or details.

The lawsuit is also seeking an additional 50 percent penalty of the unpaid loss and attorney’s fees and costs.

An email to AIG seeking comment was not immediately returned.

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