Vemma’s FTC case defense will not be insured by Hanover
Following the denial of a preliminary injunction motion a few weeks back, it appears Vemma didn’t have much left to bargain with.
Over the past few weeks they’ve been negotiating with Hanover Insurance, with a settlement reached on or around August 17th.
According to the settlement agreement final judgement on counts one and two of Hanover’s lawsuit are awarded to Hanover.
In counts one and two in their initial lawsuit, Hanover had asked the court to declare
- Vemma’s insurance policy provisions preclude coverage foe Vemma in the FTC lawsuit and
- Hanover has no duty to defend and no duty to indemnify Vemma for any loss related to the FTC lawsuit.
The remaining counts in the lawsuit were dismissed with prejudice, as was Vemma’s counterclaim in its entirety.
Judge Tuchi approved the proposed settlement agreement two days later on August 19th.
Going forward, the court has previously ordered Hanover to insure BK Boreyko’s defense in the FTC case.
What this ultimately means for Vemma is unclear. So far the company has racked up legal bills in excess of $1.3 million dollars.
In their counterclaim Vemma represented that if Hanover didn’t insure their defense, it would cause
imminent and irreparable harm … because it leaves (Vemma) without insurance coverage and the ability to defend (itself) at a critical juncture of the FTC Action.