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Berkshire Hathaway Gets Slapped With an $18 Million Lawsuit – Fortune

Berkshire Hathaway brk.a and its underwriting company, Applied Underwriters, are in the hot seat after New York City-based Breakaway Courier Systems accused the finance giant of running a “reverse Ponzi scheme.”

“Instead, Berkshire Hathaway illegally siphons off premiums through an unlicensed, unregistered and under-collateralized Hawaiian entity, leaving New York employers and injured workers without the funds that New York State requires to be available to cover losses due to worker injuries,” the complaint stated.

The terms of the agreement were “so obscure as to be unintelligible” that Breakaway ended up being responsible “for every single loss their injured employees suffer,” according to the complaint. Breakaway paid Berkshire, believing those funds would be set aside into a “protected cell,” which would eventually be returned.

Last Friday, the courier service filed a lawsuit with the N.Y. State Supreme Court for $18 million, claiming it received worker’s compensation coverage that was actually a complex and risky investment vehicle. Breakaway said the discounted Berkshire package it bought in 2009 was really an expensive “reinsurance” program that required employers to cover each other’s losses.

Berkshire Hathaway Will get Slapped By having an $18 Million Suit – Fortune

Berkshire Hathaway brk.a and it is underwriting company, Applied Underwriters, have been in the new seat after New You are able to City-based Breakaway Courier service Systems accused the finance giant of managing a “reverse Ponzi plan.”

Breakaway claims Berkshire’s companies attempted to enhance itself by moving the funds via a web of under-collateralized covering companies.

Breakaway, about 300 employees, stated it paid out $863,048.74 during the period of 3 years. It now wants a minimum of $18 million in damages.

“Instead, Berkshire Hathaway unlawfully siphons off premiums with an unlicensed, unregistered and under-collateralized Hawaiian entity, departing New You are able to companies and hurt employees with no funds that New You are able to Condition should be open to cover deficits because of worker injuries,” the complaint mentioned.

This suit uses another company, Shasta Linen Supply, sued Berkshire’s Applied Underwriters and California Insurance Provider in June—and won. That call, handed lower through the California insurance commissioner, figured that exactly the same insurance product was illegal because it modified premium rates and obligations of Shasta.

Last Friday, the courier service service filed a suit using the N.Y. Condition Top Court for $18 million, declaring it received worker’s compensation coverage which was really an intricate and dangerous investment vehicle. Breakaway stated the discounted Berkshire package it bought in ’09 really was an costly “reinsurance” program that needed companies to pay for one another’s deficits.

Primary Street Loaves of bread searching for brand new owner

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After nearly 3 decades, Dinsmores will be ready to leave popular restaurant


After nearly 30 years managing certainly one of Aspen’s most widely used breakfast and lunch spots, proprietors Bill and Jane Dinsmore will be ready to spread the Primary Street Loaves of bread and Coffee shop to new proprietors.

Primary Street Loaves of bread searching for brand new owner

After nearly 30 years managing certainly one of Aspen’s most widely used breakfast and lunch spots, proprietors Bill and Jane Dinsmore will be ready to spread the Primary Street Loaves of bread and Coffee shop to new proprietors.

find out more


After nearly 3 decades, Dinsmores will be ready to leave popular restaurant