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Nortel Insurer Might Not Cover Ex-CEO Dunns Legal Fees

Nortel Networks Corp. (NT) is having a hard time getting its insurer to cover all of former CEO Frank Dunn’s legal costs.

The bankrupt telecom equipment maker, amid all the rest of its troubles, is trying to convince a trial judge to order Chubb Corp. to pay 90-100 percent of Dunn’s legal costs. Apparently, Nortel’s insurance policy that protects execs from lawsuits is “ambiguous” at best.

Dunn was sued by U.S. and Canadian regulators in 2007 for alleged accounting fraud that took place from 200 to 2004. Nortel had a Chubb policy that, in 2001, pledged to cover the legal costs for conduct that occurred that year, Bloomberg reported. But Chubb says it doesn’t have to pay. A Canada court already has agreed with Chubb and now an appeals court says there’s not enough evidence available for interpreting the policy’s language.


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