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Tony Twardowski and Phil Magen Recover Over $2.5M for Bank Client on Employee Dishonesty Insurance Claim

November 23, 2015

Eclipsing $7 million of total insurance recoveries for a single firm bank client over the last few years, Tony Twardowski and Phil Magen recently settled for more than $2.5 million an employee dishonesty claim under the bank's financial institution bond. The claim centered around  the relationship between the bank's former loan officer and one of its commercial customers who had borrowed millions of dollars to develop property in southern New Jersey and in Brooklyn, New York. The loans ultimately defaulted at which time it was discovered that the borrower had fabricated security statements reflecting tens of millions of dollars of liquid stock holdings when, in fact, he had none. At issue in the case was whether the bank's loan officer had colluded with the borrower, or had otherwise acted dishonestly, in securing the fraudulent loans. After years of investigation, the insurer declined the claim, forcing Tony and Phil to file suit. Before an answer was filed or discovery commenced, the parties began to discuss settlement. Despite challenging coverage and proof issues, Tony and Phil ultimately convinced the insurer to fund a substantial settlement in excess of $2.5 million.  Combined with a prior recovery from a different insurer, the total recovery with respect to this matter alone amounts to nearly $4 million. 


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