The LPHI operating losses appear to have been buffered by the existance of an insurance policy that covers these types of events and has been paying the legal bills for the company related to the various lawsuits.
Do these types of insurance policies provide unlimited coverage or do they typically have some type of cap to the amount of legal fees they cover?
I am not familiar with D & O insurance, but image it will not pay if criminal activity is involved. Civil fraud? I don't know. Email IR or give her a call. She is a former shipping clerk who won't have a clue, but might walk down the hall and around two corners to find out.
Either of these policies will contain language to preclude fraud or criminal activity. Unfortunately most of the time it's too late to recover these losses. Most often these issues are not found until after depositions occur. Im sure any good attorney is aware of this. While a carrier can try to recover their losses, most recovery is done with the defendant in bankruptcy or dissolution. I'm not too familiar with Lphi. I just know this isn't a good course of events, more so with the new Le revision. I feel bad for the average investor. This isn't pretty!!