Besso paid $5 million to settle a long running case in which a former managing director was accused of fleecing a group of Caribbean hotel companies through “secret profits” to the tune of millions of dollars, a source with knowledge of the matter has disclosed to Insurance Business.
A deal was reached earlier this year that saw the protracted legal battle, which had been ongoing for several years in various guises prior to the broker’s acquisition by Ardonagh, exit the court circuit.
A representative for Bloody Bay said it would be “inappropriate” to comment on the confidential settlement figure.
“We confirm that the litigation between Besso and Bloody Bay has concluded with the parties reaching a mutually acceptable settlement, the terms of which are confidential,” said a Besso spokesperson.
In court proceedings, Bloody Bay – representing the Superclubs group of hotels – had alleged that a former Besso broker had engaged in grossing up premium and had taken “secret profits” from the group.
It had sought to recoup in the region of $10 million in the now stayed court action. Prior to its acquisition by Ardonagh, Besso had filed a counterclaim and argued the case was based on “maintenance and champerty”.
Insurance Business understands that, prior to the settlement, the Bloody Bay group had attempted to involve the regulator in a failed bid to stay Ardonagh’s acquisition of Besso until the historic matter had been further considered.
Ardonagh paid a $500 million cash consideration for Besso and BGC’s other insurance businesses, including Ed Broking, in a deal that closed in November 2021.
Charles Christopher O’Sullivan, the ex-managing director named in proceedings as having engaged in the alleged misconduct who has been nicknamed the “pirate of the Caribbean” in reports, was not immediately available for comment.
O’Sullivan was censured by a Lloyd’s tribunal in 2017 on three counts of discreditable conduct and ordered to pay council and tribunal costs totalling upwards of £120,000. Had O’Sullivan not faced an interim suspension of his Lloyd’s pass, the tribunal said he could have also faced a £135,000 fine due to the “sufficiently serious” nature of its findings.
The former managing director was also barred from doing business in the insurance marketplace and from entering the underwriting room.
The Lloyd’s enforcement tribunal found he had engaged in “deception” while at Besso, where he worked until 2011, and later at Bennett Gould & Partners where he was fired for gross misconduct in 2012.
Correction: This report originally stated £5 million, which was a misprint. It has now been updated to correctly reflect $5 million.