SAN DIEGO — The insurance company that protected Oak Industries' officers and directors from individual liability has filed a civil lawsuit in federal court here asking that its policy be voided because of misrepresentations by Oak management.
The lawsuit makes uncertain the status of a proposed settlement between Oak and the plaintiffs in a class-action shareholders lawsuit.
The settlement, calling for the financially ailing Oak to pay $13.25 million and for the insurance carrier to pay between $30 million and $40 million, was tentatively reached last week. But questions about the liability of the individual officers and directors postponed an announcement of the settlement, and the suit by the insurance company further clouds the status.
Oak officials would not comment Monday on the suit, filed by Federal Insurance Co., a subsidiary of Chubb Corp. of Warren, N.J.
The carrier's suit claims that, between January and October, 1982, Oak "disseminated untrue statements" regarding deficiencies with its TC-56 cable-television converters. In addition, the suit maintains that Oak's plans to begin direct-broadcast-by-satellite service as well as Oak's competitive posture in the subscription-television industry were "highly speculative (and) unrealistic."