|MARCY GORDON, AP Business Writer|
And Corzine isn't the only one who may be financially vulnerable after the eighth-largest bankruptcy in U.S. history. Others include
Corzine and other senior executives likely share a liability insurance policy to cover potential lawsuits against them. But experts say potential damages sought could well exceed the limits of their policy.
Corporate bankruptcy is a "litigation nightmare: Everyone ends up suing everyone," said
Private litigation has already begun. At least two class-action lawsuits on behalf of
No one at
A public relations firm hired by Corzine and a spokeswoman for
It isn't clear just how much money Corzine is worth. He spent roughly
Corzine's disclosure filings as governor, through 2009, provide less detail on his finances. They do show he held interests in real estate partnerships, investment companies, hedge funds and private equity funds.
Legal experts say Corzine could be held personally liable for misrepresenting to investors the risks that the firm had taken.
Under a 2002 anti-corporate fraud law _ which Corzine co-wrote as a U.S. senator _ CEOs of public companies must personally certify the accuracy of their company's financial statements.
If client money was used by the firm for its own purposes, Corzine could be held responsible, said
"That would be the house gambling with customers' money," Ajamie said.
"Anyone who has a deep pocket gets sucked in," Elson said.
Major companies typically provide liability insurance for top executives and their directors. The insurance covers the legal costs in case they're sued by shareholders or others and the damages they might have to pay.
The insurance provides a single pot of money for executives and board members, usually in the hundreds of millions of dollars. Companies offer the insurance as a perk to recruit executive talent, experts say. The insurance kicks in if executives or directors are accused of breaches of duty and "wrongful acts" that stop short of fraud, such as misstatements to investors.
Experts say the damages or penalties that could be sought in
"They'll be looking under every rock," Welin said. "And if that rock has deep pockets, they'll look even closer."
AP Business Writer
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