Re: XP's at Walmart
Well sure, but the intellabees will be quick to point out that Wal Mart only has 3,100 or so outlets (including SAM's stores) while CompUSA has over 400!
Also, CompUSA's management has had the benefit of being able to focus its attention on this instead of its business:
CompUSA insurer fights $234M claim
Jeff Bounds Staff Writer
NORTH DALLAS -- An insurer for CompUSA is fighting the computer retailer's attempt to make it liable for $234 million in damages that were awarded by a Dallas jury in February against CompUSA's former CEO.
In a lawsuit in federal district court here, Indiana-based Federal Insurance Co. claims that CompUSA and its former chief executive, James F. Halpin, gave the carrier insufficient notice of the litigation that resulted in the Feb. 8 verdict.
That damage award was part of a $454.5 million verdict against Halpin; Dallas-based CompUSA; its owner, Mexican billionaire Carlos Slim Helu; and two Slim-controlled Mexican companies that run CompUSA.
The outcome of the breach-of-contract suit, which was brought by Dallas-based COC Services Ltd., has helped push down the share price of Grupo Carso S.A., a Slim-controlled Mexican conglomerate that controls a Slim retailing company, Grupo Sanborns S.A., which in turn runs CompUSA.
COC claimed in its lawsuit, which was filed in February 2000 in Dallas County court, that the defendants broke a contract giving COC exclusive franchising rights to CompUSA in Mexico.
The jury ordered Halpin to pay the equivalent of $58.5 million in damages for intentionally interfering with an existing contract, plus $175.5 million in punitive damages.
Among other things, according to Federal's lawsuit, the jury found that Halpin had conspired with CompUSA to interfere with COC's contractual right to run stores in Mexico, and that both Halpin and CompUSA had acted with malice.
According to Federal's lawsuit, CompUSA waited until a week after the jury verdict to notify Federal both of the legal charges against Halpin and the damage award. This, Federal claims, meant it couldn't be involved in investigating or fighting COC's claims.
Federal also sent a letter to CompUSA indicating it believes the damage award against Halpin isn't covered by CompUSA's liability policy. Federal contends the damages against Halpin did not result from anything he did in an "insured capacity" -- and thus don't amount to a loss under the policy's terms.
Federal is asking a federal district judge in Dallas to clarify its rights and obligations in the dispute.
CompUSA's lawyer, Theodore Daniel, called the Federal lawsuit "premature," since the company and its corporate parents have asked Judge Carlos Lopez to overturn the COC Services verdict.
As of Wednesday night, when the Dallas Business Journal went to press, lawyers on both sides were still awaiting Lopez' ruling.
"The judgment hasn't been entered yet," says Daniel, an equity shareholder at Jenkens & Gilchrist. "If the judgment's not entered, there's no need for the insurance company to squawk over coverage."
Daniel, who will represent CompUSA in the Federal litigation, wouldn't comment on Federal's allegations.
Halpin likely won't be personally liable for any damages against him in the COC suit.
As part of his employment agreement with CompUSA, the company agreed to indemnify Halpin for damages awarded against him that resulted from his conduct as an officer of the company.
Federal's insurance, called an "executive protection" policy -- roughly the equivalent of directors and officers insurance -- essentially protects CompUSA from any damages arising from Halpin's conduct, including anything for which it must indemnify him.
"If the indemnity is honored" by CompUSA, Daniel says, Halpin won't have to pay anything out of his own pocket.
COC Services' attorney, Mark Werbner, says that beyond the insurance policy and CompUSA's indemnity, Halpin also has a "substantial net worth," including what Werbner described as a $21 million payment that Halpin received when CompUSA was purchased by Slim.
"Through all those sources, we are confident we will be able to collect substantial sums" of the judgment against Halpin, if not the whole amount, Werbner says.
Efforts to reach a CompUSA spokesperson and Halpin's attorney were unsuccessful.
dallas.bcentral.com |
