Hurricane law firm, mired in fraud allegations, files for bankruptcy
Hurricane law firm, mired in fraud allegations, files for bankruptcy | Insurance Business America
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Hurricane law firm, mired in fraud allegations, files for bankruptcy
McClenny Moseley faced fines, a criminal investigation, legal action, and now apparently bankruptcy
Texas headquartered law firm McClenny, Moseley & Associates (MMA), which has faced fraud allegations and multi-million-dollar fines over “tech-enabled” hurricane lawsuits, has filed for bankruptcy.
The law firm shot to infamy in the Louisiana insurance community last year, when it transpired the business had signed up potentially thousands of policyholders for hurricane-related home insurance claims, in many cases without their knowledge.
Chapter 11 bankruptcy protection documents signed by MMA Law Firm managing partner Zach Moseley, dated today, indicated the business has upwards of $100 million in assets and $10 million in liabilities.
“If your assets are 10 times your liabilities, how are you bankrupt? It will be very interesting to see if this is just a mistake, or whether MMA really has over $100 million in assets,” Matthew Monson, The Monson Law Firm founder and manager and the tipster who first brought the law firm to the Louisiana Department of Insurance’s (LDI) attention, queried in a Linkedin post on Tuesday.
MMA’s “illegal scheme” like nothing insurance commissioner had seen before
The LDI slapped MMA with fines totaling $2 million in February 2023. The firm had filed 1,500 hurricane lawsuits in just three months as it looked to mass settlement tactics. Many insureds were not aware that the firm claimed to represent them, the LDI found.
Former Louisiana Commissioner of Insurance Jim Donelon described MMA’s “illegal scheme” as “like nothing I’ve ever seen before”.
MMA’s aggressive marketing tactics reached Louisiana insurance industry professionals, who previously told IBA they had received numerous unsolicited messages from the firm urging them to file lawsuits for storm damage.
Outside of its regulatory wranglings, MMA has found itself dogged by legal actions, including a class action spearheaded by Monson’s wife, Katherine Monson. The business has sought to appeal a $10 million default judgment in a case brought by PCG Claims.
MMA was not immediately available for comment.
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