Credit Lyonnais Faces $2-Billion Lawsuit

Paris-based Credit Lyonnais faces a $2-billion lawsuit by Sierra National Insurance Holdings Inc. for alleged fraud in the French bank’s 1991 purchase of Executive Life Insurance Co.’s assets. The suit was filed this week in Los Angeles County Superior Court by now-defunct Sierra National Insurance, which said it was the only other viable bidder for Los Angeles-based Executive Life, and Sierra’s court-appointed receiver. The suit alleges intentional and negligent interference with economic expectancy, racketeering violations and abuse of process. The suit also names French billionaire Francois Pinault, who is accused of buying Executive Life bonds despite knowing they had been fraudulently obtained by a Credit Lyonnais subsidiary. The California insurance commissioner in 1999 sued Credit Lyonnais, seeking to recover more than $2 billion in losses.