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Follow UsNEW YORK: Continental Casualty Co. has sued WorldCom's former chief executive officer and
others seeking to rescind certain policies because they were issued based on fraudulent financial information.
Among defendants in the suit are Bernard Ebbers, former chief executive officer, and Scott Sullivan, former chief financial officer. Sullivan is fighting conspiracy and fraud charges stemming from the accounting scandal at the telecommunications giant.
Continental Casualty is a unit of CNA Financial Corp.
WorldCom Group has fired Sullivan in June when the accounting scandal emerged. The Clinton, Mississippi-based company filed for the world's largest bankruptcy a month later. Ebbers resigned from WorldCom in April as its financial and legal problems mounted. Since then, the company has said its accounting problems would force it to restate more than $9 billion in results.
Continental underwrites insurance of various types including policies known as director and officer liability policies and fiduciary and related liability or blended policies.
The suit states that in 2001 WorldCom contacted Continental to obtain both director and officer liability and blended policies in excess of primary coverage.
The insurance company alleged that WorldCom provided it with false information about the company's financial status in order to obtain the policies. Because of this, the insurer is seeking a court ruling holding the policies to be void.
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