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.