Fortress Re

Fortress Re Inc. was an American aviation reinsurance agency, based in Burlington, North Carolina, and co-owned by Maurice 'Chico' Sabbah.[1] Their auditor was Deloitte & Touche.[2][3]

Financial trouble

The agency was dealt a heavy blow by the September 11 attacks. Fortress Re pooled the funds of several insurance companies to share the risks of reinsuring aviation portfolios. All four planes that crashed on September 11, 2001 were ultimately reinsured into the Fortress Re pool. The participating companies faced claims of $2.5 billion, and the Fortress Re funds fell far short.[4]

Other airline disasters followed, including a passenger jet crash in the New York City borough of Queens on 12 November 2001. Fortress Re stopped writing new business at this time, and has not recommenced.

Legal action

Legal actions began from a number of Japanese insurance companies at the start of 2002 towards the directors of Fortress Re, alleging Fortress Re had misrepresented losses and performed other improper acts, including Sabbah and his partner "amassing personal fortunes" by skimming money off the top from Sompo’s funds. Sabbah denied any wrongdoing.

In 2004, the two directors of Fortress Re were collectively forced to pay $1.12bn by a court in New York, for defrauding Sompo Japan Insurance. [5]

Maurice Sabbah was the donor of a reported $100 million to American Hebrew Academy in Greensboro, North Carolina. Japanese insurers who were covered by Fortress Re reached an agreement in their effort to recover some of their losses by suits against the Hebrew Academy. The specifics in regard to the settlement remain undisclosed.[6]

References

  1. ↑ http://www.lexislegalnews.com/articles/1852/reinsurance-pool-agent-statute-of-limitations-has-passed-on-assignee-s-claims
  2. ↑ http://www.forbes.com/forbes/2002/0930/400086.html
  3. ↑ http://ww2.cfo.com/risk-compliance/2004/11/deloitte-sued-for-2-billion/
  4. ↑ http://www.wsj.com/articles/SB107213639671315800
  5. ↑ http://www.institutionalinvestor.com/Article/1031949/Fortress-Re-forced-to-pay-112bn-for-defrauding-Sompo.html
  6. ↑ http://www.greensboro.com/news/general_assignment/fortress-re-s-kornfeld-had-fast-rise-faster-fall/article_23c280f8-45f2-5f2c-8ed5-cbf30dba31ee.html

External links


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