Posted on Nov 30, 2020 at 7:43 am
The “stress test” ends badly for customers of insurance “guarantee of liabilities” against the risks of fraud during mergers and acquisitions (Warranty and Indemnity, W&I). After five years of proceedings, the Japanese group Lixil still cannot use its insurance against damage estimated at 270 million euros for the acquisition of Grohe, one of the largest claims concerning this booming insurance sector. expansion. On November 26, the Frankfurt Court of Cassation once again ruled in favor of the main insurer of a consortium, the American AIG, but the case is not necessarily over.
The story begins when Lixil bought German bathroom equipment manufacturer Grohe in 2014 for 3 billion euros. A year later, dismay: the German jewel loses its luster when accounting manipulations in a subsidiary of Grohe based in China but listed in Frankfurt, Joyou, are revealed. The losses amount to $ 560 million. Lixil then tries to use his “W&I” insurance. In vain for the moment.