A suit against former Safeco Chairman Mike McGavick, accusing him of improperly taking a $28 million severance package, is political, said Mr. McGavick, who is now a U.S. Senate candidate.
The stockholders action was filed yesterday by the great-great-granddaughter of a Safeco founder and was immediately labeled a "politically motivated character attack" by the former boss of the Seattle-based insurer.
Emma Schwartzman, 27, filed the suit in U.S. District Court in Seattle, claiming that when Mr. McGavick was given a $28 million severance package by Safeco, on his resignation last year, it violated federal securities laws because of its size and lack of transparency.
Mr. McGavick, a Republican, left the company to seek elected office. He is running against Sen. Maria Cantwell, D-Wash., in the November election.
"The allies of the incumbent senator have found yet another avenue to continue their daily personal attacks on me," Mr. McGavick said in a statement.
Ms. Schwartzman's great-great-grandfather was C.D. Stimson, who co-founded a predecessor of the Seattle-based property-casualty insurer. She filed lawsuit on behalf of all Safeco shareholders.
Her attorney, Knoll Lowney, asserted that the document Mr. McGavick and Safeco executed in December of 2005 was merely a "fraudulent transaction to carry out an illegal giveaway of Safeco assets, including returning all of the stock options and the bonus [Mr.] McGavick would have forfeited upon resigning."
As for its alleged political motive, Mr. Lowney noted two other defendants in the lawsuit are prominent members of the Democratic Party, including a former governor, Gary Locke.
Cantwell campaign spokeswoman Amanda Mahnke said the candidate would not comment on a matter between Mr. McGavick and the Safeco shareholders.
Safeco issued the following statement: "The compensation decisions that the plaintiff finds objectionable were thoroughly vetted by the board's Compensation Committee, validated by two independent compensation advisors, and approved by the full board of directors. In any event, we will vigorously defend the company and our directors. We do not anticipate any material adverse effect arising from this lawsuit."
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
