Business Insurance Disputes

After the 2008 financial crisis, hundreds of thousands of Americans were defrauded into paying millions of dollars in fees to dubious “debt settlement” scams. These companies promised to settle consumers’ debts for “pennies on the dollar” but often ended up taking up-front fees and delivering nothing in return.

In the Meracord/NoteWorld litigation, we brought multiple class-action lawsuits against a major player in the debt settlement industry on behalf of defrauded consumers. A federal judge in Washington certified the class and awarded $1.45 billion in damages against Meracord. Unfortunately, by that point, the company had already gone out of business.

But where others might have given up, we got creative. We brought a class-action lawsuit against the insurance company that had issued the surety bonds backing Meracord’s business licenses. (As far as we could tell, no one had ever brought a class action against licensing bonds – our lawsuit was the first of its kind.) After continually insisting that their surety bonds did not cover the claims of consumers we represented, the insurance companies ultimately ended up paying out over $15,000,000 – representing nearly 90% of their maximum total exposure on the bonds. After approving the final settlement, the federal judge presiding over the case noted that “plaintiffs’ counsel, through great persistence and just plain hard work for the class members, achieved what can only be regarded as an extraordinarily good result.”