Thursday, October 15, 2009

Insurance slugfest with accusations of espionage

richmondbizsense.com
A Richmond-based insurance company thinks its former CEO went rogue and broke his contract when he left to start a competing firm. The company wants its day in court and an injunction against the upstart.

The startup, meanwhile, says it followed all non-compete clauses and that it’s ploy to drown it in legal fees before it can launch successfully.

For six years, Mike Kehoe was the boss at James River Insurance. He helped get the company going in 2002 and helped it grow. He also helped sell it for $575 million in 2007, pocketing $6.4 million in stock options and bonuses, according to the lawsuit.

But something went wrong after the buyout, and Kehoe left in May 2007 and started working on his own insurance startup, Kinsale.

And that’s about when the trouble started. In a suit filed in July in U.S. District Court in Richmond, James River Insurance seeks to prevent Kinsale from launching, and seeks compensation for the damage it has suffered and may suffer. It is also seeking a jury trial, which has been tentatively scheduled for January.

James River claims Kehoe committed business espionage when he left to form a competing firm, and that he and other accomplices stole secrets and some of its top employees, who also hacked computers and ordered a hard drive “swap” to hide their alleged misdeeds. Kinsale has at least four former James River executives on staff, according to the complaint, and may have hired more.

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