By Matt Brady
A lawsuit filed against Pennsylvania-based life settlement company Coventry First has been dismissed by a federal judge in New York.
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Judge Denise Cote of the /southern District court of New York granted a motion dismissing the suit by Coventry on Tuesday. The suit was filed by Geneva, Illinois-based Ritchie Capital Management and sought as much as $2 billion in damages.
The suit cited Coventry for alleged fraud, breach of fiduciary duty and breach of contract. The suit made its allegations under the federal Racketeer Influenced and Corrupt Organizations, or RICO Act, which increases the penalties for acts committed as part of an ongoing criminal enterprise. Had it been found guilty of violations under the RICO Act, Coventry would have to pay three times the $700 million that Ritchie Capital Seeks in the complaint.
For its part, Coventry maintained that the suit was largely a publicity stunt, and chief executive officer Alan Buerger said after the dismissal that the company was “pleased that the Court recognized Ritchie’s desperate attempt to divert attention from its poor performance.”
He hailed the ruling as an “obvious victory for the truth,” and said that Coventry “will not allow unprovoked and unwarranted attacks on its credibility and integrity to diminish efforts to provide life insurance consumers with more value and investors an opportunity to invest in a new asset class.”
Although the judge did dismiss all claims in the suit, she said in the ruling that Ritchie could attempt to re-plead two of the RICO-related charges and an allegation of breach of contract.
“Ritchie is refiling immediately to address the points made by the judge,” a Ritchie spokesman says. Ritchie believes that it all of its main points will be in the amended complaint, the spokesman adds.