A Louisiana
state jury has decided that Cumulus/Citadel Broadcasting Corp. is owed nearly
$9 million in a breach of contract suit accusing Axis US Insurance Co. of not
fully compensating the company for damages its radio stations incurred as a
result of Hurricane Katrina. The
hurricane struck New Orlando on August 29, 2005.
According to Law360, the jury said Citadel is owed $5.9 million over claims that
business interruptions caused by the disaster resulted in lost advertising
revenue for the radio stations and $2.9 million over claims that Axis acted in
bad faith with its insurance policy.
Citiadel owned three NOLA stations when Katring ravaged the
city. KMEZ 106.7 FM returned to the air
9/30/05, WDCW 9/16/05 (now WRKN); however, KKND 102.9 FM didn’t return to
on-air until 1/11/06. Axis US Insurance Company alleged that it was only
responsible for lost income during the period the stations were actually off
the air. Citadel sued in Louisiana
state court. Law360 now reports that a jury has awarded Citadel (now Cumulus)
$5.9 million for its claims of business interruption from lost advertising.
Plus an additional $2.9 million for Citadel’s allegation that Axis acted in bad
faith.
On top of that, the jury found that Axis was liable for
$2.95 million in attorneys’ fees owed by Citadel to Reed Smith LLP, plus
another $250,000 in costs.
Axis is considering to appeal.
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