One of the major points of contention was CNA’s proposed “first-come, first-served” method for distributing benefits. Friedberg argued that this method was unfair due to timing, pointing out that Bankman-Fried was indicted and sued before he faced litigation. He emphasized that California’s principles of equitable allocation should come into play when the total defense costs are expected to exceed the policy limit.
“Under any conceivable equitable allocation, Mr. Friedberg is entitled to substantial coverage proceeds to fund his defense,” Friedberg asserted.
Bankman-Fried’s Lawsuit Against Excess Insurer: A High-Stakes Battle
The battle over insurance coverage intensified when Friedberg revealed that the underlying layers of the insurance tower had already paid out more than $10 million in benefits using the first-come, first-served approach to 13 insureds. Shockingly, more than $2.5 million of that amount had gone to three insureds who had pleaded guilty to criminal charges, including fraud.
