Monday, November 18, 2013

Jury Awards Cumulus Media $8.8M For Katrina Losses

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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