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Thursday, August 03, 2006

Insurance company renews Intermet suit

After the New River Foundry's owner filed for bankruptcy, a company is seeking $2 million from the foundry's insurers.

A Rhode Island insurance company has renewed a lawsuit stemming from the 2000 explosion that killed three workers at New River Foundry.

Factory Mutual Insurance Co. is seeking $2 million from each of the three companies that insured the foundry at the time of the explosion.

The original lawsuit was filed against foundry owner Michigan-based Intermet Corp. in August 2003 by Factory Mutual and American Axle Manufacturing. Together, they sought reimbursement for a policy claim in excess of $2 million that Factory Mutual paid American Axle after the explosion.

According to the original complaint, New River Foundry had a contract with American Axle to produce parts. When the explosion occurred, American Axle claimed it sustained substantial product losses because of Intermet's negligence.

But Intermet, which makes structural components for automotive companies, declared bankruptcy in September 2004, forcing a stay in the case. Because of the bankruptcy, Factory Mutual was forced to go after Intermet's insurance companies for reimbursement.

The federal lawsuit filed Monday seeks damages from Liberty Mutual Insurance, National Union Fire Insurance and American Guarantee and Liability Insurance.

Spokespeople for Liberty Mutual and American International Group, National Union's parent company, declined to comment on the pending litigation, as did a spokesman from American Guarantee's umbrella company, Zurich North America.

In 2001, Intermet agreed to pay $761,000 -- the largest workplace safety fine in Virginia's history -- for violations discovered after the explosion.

After the company filed for bankruptcy, the Radford Foundry closed. The New River one remains open and, as of April 30, employed more than 450 people.

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