American Continental Insurers Sued

Bondholders of bankrupt American Continental Corp. filed a class-action lawsuit Wednesday to seek a court order enforcing insurance policies that 21 carriers provided for the directors and officers of the company and its primary unit, the failed Lincoln Savings & Loan in Irvine.

The bondholders already have filed more than 15 lawsuits against the company and thrift seeking the return of about $200 million in investments. Insurers have refused to defend the directors and officers or to acknowledge that their policies cover the negligence and other wrongful acts alleged in the litigation.

The latest suit, filed in Orange County Superior Court in Santa Ana, seeks a court order stating that the insurance policies cover the alleged wrongdoing, that certain language in the policies is so ambiguous that it shouldn’t be enforced, and that the carriers are liable for damages if the plaintiffs win a judgment.