Household International sues insurer over coverage

Household International Inc., found liable last year by a Chicago jury for misleading investors about the company's business practices, sued an insurance company in a bid to force payment of its legal bills.

Princeton Eagle West Insurance Co., based in Hamilton, Bermuda, is refusing to provide $25 million of coverage, contending that some of the claims in the lawsuit predate Nov. 1, 2000, when the policy went into effect, Household Financial said yesterday in documents in federal court in Chicago.

"It is virtually certain that the entire limits of the Princeton policy will be needed for ongoing defense costs," Household said in its statement of claim. "Princeton flatly denied Household's request for payment."

The jury last May 8 found the company and three executives including Chief Executive Officer William Aldinger, misled investors from 1994 to 2005 with reckless remarks in financial statements, inflating the value of the shares.

The insurance case is Household International Inc. v. Princeton Eagle West Insurance Co. 1:10-cv-02418. U.S. District Court, and the shareholder suit is Lawrence E. Jaffe Pension Plan v. Household International Inc., 1:02-cv-05893, U.S. District Court, Northern District of Illinois (Chicago).