Declarations

Two Years and Still Waiting

“This storm happened more than two years ago. … We believe it should have been resolved long before now.”

—Gerald Gussoni, attorney for the Port of New Orleans, commenting on the port’s fight with an insurance carrier over more than $100 million in storm damage claims resulting from Hurricane Katrina in August 2005. The port is suing Factory Mutual Insurance Co., claiming the insurer has only paid about $18 million from a policy that has limits of $145 million for flood and wind damage. The port has estimated its storm damages at about $175 million, which includes property losses and business interruption.

Legal Workers Hard to Find

“In the small communities where you’ve got seasonal work, it’s hard to find legal people who want to work. … I’m down to one crew because I can’t find enough help to run 24 hours a day anymore.”

—Chris Ellison of the Motley Gin in Hollis, Okla., says the Oklahoma’s new anti-illegal immigration law is causing problems for some farmers and agricultural businesses. Hispanic workers fearful of being deported area apparently are staying away from work. House Bill 1804, which went into effect Nov. 1, gives local authorities more enforcement options against undocumented workers and increases penalties against employers who hire or harbor illegal immigrants. Ellison said he had to cut his labor force by 50 percent and cease ginning during the night shift.

Federal Measure ‘Falls Short’

“(The Homeowners Defense Act of 2007) will not generate new private sector insurance, reinsurance or capital market capacity, and is likely to encourage states to create thinly financed, state-run reinsurance facilities that will displace the private market and require a federal government bailout in the event of a catastrophe.”

—Marc Racicot, president of the American Insurance Association, commenting that HR 335 legislation that recently passed in the House of Representatives by a 258-155 vote falls short in trying to address catastrophe risk problems in coastal insurance markets.

Subprime Side-Effect

“Citigroup, under defendants’ direction, recklessly spent billions of dollars purchasing subprime loans to be warehoused for future collateralized debt obligations. These actions were reckless due to the impending subprime mortgage crisis and increasing delinquency rates among subprime borrowers.”

—Statements filed in a shareholder derivative lawsuit in federal court, alleging that Citigroup Inc. former CEO Charles Prince and other company executives recklessly purchased subprime loans to be used for future collateralized debt obligations and then made improper statements regarding the financial services company’s exposure to the subprime market meltdown. The derivative suit is part of the subprime mortgage fallout and follows a separate lawsuit filed earlier in New York on behalf of participants or beneficiaries of Citigroup’s retirement plans, which alleged the company’s stock was an “imprudent investment” for the plans because of mismanagement and improper business practices at the company.