AERT Fire Claim Enters Litigation

Lloyd's filed suit January 19, 2005, in the Circuit Court of Washington County, Arkansas, seeking a declaratory judgment that it is not liable to reimburse AERT for certain costs of rebuilding the company's Junction, Texas, plant. Lloyd's alleges that AERT did not rebuild the facility exactly as it had existed prior to the March 2003 fire and that AERT committed fraud in seeking reimbursement for alleged improvements made to the plant. Lloyd's also seeks to retroactively cancel its portion of the insurance policy.

AERT says that the filing was unexpected because it has cooperated fully with the claims underwriting process and negotiations toward a final settlement of the claim were progressing.

In a press release, AERT says it believes the lawsuit is without merit and that it filed a counterclaim Jan. 24, 2005, denying all of Lloyd's allegations and seeking immediate and full reimbursement for rebuilding of the plant. AERT seeks to recover actual damages in the amount of at least $1.8 million plus attorney and court fees and punitive damages for acts of bad faith committed by Lloyd's.