Hurricane Law Firm Embroiled in Fraud Allegations Files for Bankruptcy | Insurance business America
McClenny Moseley faced fines, a criminal investigation, legal action and now, apparently, bankruptcy
Texas-based law firm McClenny, Moseley & Associates (MMA), which faced fraud allegations and millions of dollars in fines over “technology-enabled” hurricane lawsuits, has filed for bankruptcy.
The law firm gained notoriety in the Louisiana insurance industry last year when it emerged that the company may have signed up thousands of policyholders for hurricane-related home insurance claims, in many cases without their knowledge.
Chapter 11 bankruptcy protection documents signed today by MMA Law Firm Managing Partner Zach Moseley reveal that the company has over $100 million in assets and $10 million in liabilities.
“If your assets are ten times your liabilities, how can you go bankrupt? “It will be very interesting to see if this is just a mistake or if MMA really has a net worth of over $100 million,” said Matthew Monson, founder and manager of The Monson Law Firm and the tipster who owns the law firm brought to the Louisiana Department of Insurance (LDI) attention for the first time in a Linkedin post on Tuesday.
MMA’s “illegal system” is unlike anything the insurance commissioner has seen before
The LDI imposed fines totaling $2 million against MMA in February 2023. The company had filed 1,500 hurricane lawsuits in just three months due to mass settlement tactics. According to LDI, many insureds were unaware that the company claimed to represent them.
Former Louisiana Insurance Commissioner Jim Donelon described MMA’s “illegal system” as “like nothing I’ve ever seen before.”
MMA’s aggressive marketing tactics reached insurance industry professionals in Louisiana, who had previously told IBA that they had received numerous unsolicited messages from the company encouraging them to file storm damage claims.
Aside from the regulatory battles, MMA faced legal action, including a class-action lawsuit led by Monson’s wife, Katherine Monson. The company has been attempting to appeal a $10 million default judgment in a case brought by PCG Claims.
MMA could not immediately be reached for comment.
Do you have any perspective on the hurricane home insurance scam or MMA’s bankruptcy filing? Leave a comment below
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2024-04-09 21:30:26
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