Sonnenschein Wins Appeals Court Ruling in Market Timing Case

February 28, 2008

A group of Sonnenschein attorneys, led by Alan Gilbert, successfully culminated more than four years of defending Allmerica Financial Life Insurance and Annuity, part of The Hanover Insurance Group, with a 7th Circuit Court of Appeals ruling that Allmerica is not liable for any breach of contract damages.  Sonnenschein was brought into the case in place of prior counsel to defend a damage claim, brought by Emerald Investments, when Allmerica was facing a summary judgment on liability. 

Allmerica had been sued in federal court for the Northern District of Illinois for hundreds of millions of dollars in trading losses by Emerald, a fund engaging in market timing.  Emerald claimed its annuity contracts were breached when Allmerica imposed restrictions to prevent it from trading international mutual fund shares through variable annuities for a quick profit.

Emerald sought to recover all of the profits it says it would have obtained over the 25-30 year life of the annuities, but our Sonnenschein team convinced a jury to limit Emerald's damage award to just $1.1 million.

Upon appeal, the entire damages award was overturned.