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Monday March 14, 06:42
Deloitte is to face a join trial
(by Peter Van Bruggen)

Auditing firm Deloitte & Touche LLP obtained a favorable ruling in a North Carolina case over the collapse of aviation-reinsurer Fortress Re Inc in which it was sued for billions of dollars by Japanese insurers.

In a ruling issued last week, Richard J. Wertheimer, a special master supervising discovery in the case recommended that three separate lawsuits filed against Deloitte be united. His decision does not meet plaintiffs’ expectations to deal with separate trials.

The case could turn into one of the most outstanding legal claims against Deloitte, and is one in a string of lawsuits against Big Four accounting firms.

The three suits in the case comprise two filed by Japanese insurers who were direct participants in the Fortress Re pool, and a third issued by liquidators for a related former Bermuda reinsurer, Carolina Re. The Japanese insurers, Sompo Japan Insurance Inc. and Aioi Insurance Co., accuse Deloitte of failing to disclose billions in hidden claims which resulted into $3.5 billion losses by pool members.

Deloitte has denied liability, saying that Fortress Re should be charged with any misleading or incomplete financial information itself.

According to the ruling released on March 8, special master Richard J. Wertheimer supported Deloitte’s motion that the cases should be tried together, saying they raise many common questions of law and fact, and a joint trial would reduce unnecessary expense and delay.

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