Justice Shirley Werner Kornreich
Insurer Chartis moved to dismiss the complaint. Non-party LaSalle Bank loaned $103 million to Mexican entities, and purchased a political risk insurance policy from Chartis providing coverage for loss caused by an Expropriatory Act, and resulting solely from a condition of currency inconvertibility or non-transfer. The policy noted it did not cover losses caused by or resulting from bankruptcy or financial default, except where such default was caused directly by an insured event. Mexican Borrower affiliates and guarantors Carbonell and Grupo Costamex approved a voluntary bankruptcy for one of the borrowers, but plaintiff argued they lacked authority to commence a bankruptcy action. Chartis then denied coverage for plaintiff’s loss. The court rejected plaintiff’s assertion that a Mexican Court’s allegedly erroneous ruling constituted a change in Mexican law, and the Expropriatory Claim was dismissed. Chartis argued the loss was caused by bankruptcy which was not covered under the policy. Yet, the court noted the fact a loss was caused by a bankruptcy court order did not mean the loss was caused by bankruptcy, denying Chartis’ motion to dismiss the Currency Claim, and staying discovery until an investigation into the status of the Mexico proceedings was conducted.
