AIG Specialty Insurance Company dropping $1.1 mn lawsuit against Accellion

Insurer AIG tried to hold Accellion responsible for a zero-day criminal hack of its legacy File Transfer Appliance software, but in an unusual turn of events, its lawyers were forced to pay Accellion five times the amount of the settlement.

Accellion, which delivers data privacy and compliance for sensitive content communications through its Private Content Network, announced AIG Specialty Insurance Company dismissed all claims against Accellion and AIG’s law firm paid Accellion $12,500 for its abuse of the discovery process after AIG sued the company over its role in a zero-day criminal hack of its legacy File Transfer Appliance (FTA) software.

The lawsuit, brought in subrogation on behalf of an entity insured by AIG, sought to recover $1,066,507.52 in alleged damages.

But after conducting discovery and exchanging expert reports, Accellion made a proposal to AIG it couldn’t refuse: a mere $2,500 payment to resolve all claims against the company. AIG accepted the offer, which exposed it to attorney-fee shifting in the event of a loss at trial.

But AIG’s lawyers at Gordon Rees had to pay a much steeper price, with the firm shelling out $12,500 to Accellion based on its discovery abuses in the lawsuit.

The Magistrate Judge overseeing discovery in the case ruled that Gordon Rees’ behavior was “disingenuous” and “deceptive,” and ordered “that neither [discovery] motion was substantially justified and that there are no circumstances that make an award of expenses to [Accellion] unjust.”

Accellion team worked around the clock following the criminal hack to provide unwavering support to customers affected by the incident.

Jonathan Yaron, Chief Executive Officer at Accellion

Further, of the customers impacted by the FTA breach, over 90% of them migrated to our Kiteworks solution and continue to be valued customers.

by Nataly Kramer