GE Owed No Fiduciary Duty to EMLICO, State Judge Rules

BOSTON - General Electric Co. did not owe a fiduciary duty to Electric Mutual Liability Insurance Co. and cannot be held liable for allowing EMLICO to conceal its imminent insolvency in order to change its domicile to Bermuda, a Massachusetts state justice has ruled. General Electric Co. v. Lines, et al., No. 2006-3106-BLS1 (Mass. Super.).

In an Aug. 3 ruling, Justice Margaret R. Hinkle of the Massachusetts Superior Court ruled that as EMLICO's sole policyholder, shareholder and creditor, GE owed no fiduciary duty to the insurer and therefore may be entitled to coverage for environmental claims under certain EMLICO policies.