I love the smell of insurance coverage litigation in the morning!
St. Paul Fire & Marine Insurance Co. issued Enron Corp. a crime loss indemnity policy covering the period between Jan. 1, 1997, and Jan. 1, 2003. Federal Insurance Co. and The Great American Insurance Co. sold excess policies to the primary St. Paul policy, which offered $25 million in coverage.
During the policy period, Michael Kopper, former Enron finance funding group director, and Andrew Fastow, former Enron vice president, allegedly committed wrongful acts that caused Enron to pay $20 million for National Westminster Bank's interests in a business, which National Westminster had been tricked into selling for only $1 million - far less than the interests' actual worth. Kopper and Fastow, along with employees of the other corporation, were accused of pocketing the difference. Kopper and Fastow later pleaded guilty to criminal charges related to this activity, and federal investigations into the matter are ongoing.
National Westminster sued Enron in 2002 to recover the funds obtained by Kopper and Fastow and the other employees regarding the fraudulent transaction. Enron, now bankrupt, filed a declaratory judgment action seeking coverage for the National Westminster claims it asserts St. Paul and the other insurers owe under the terms of the crime loss indemnity policy.
Details here from LexisOne.com.