$215 Million Insurance Recovery for Pinnacle Entertainment
Finalizing one of the largest insurance claims stemming from Hurricane Katrina, leading casino and entertainment company Pinnacle Entertainment, Inc. (NYSE: PNK) will receive a $23.4 million payment from RSUI Indemnity Co. for damages to certain of its Gulf Coast properties. With this last payment, Pinnacle will have received over $215 million in insurance claims stemming from the 2005 hurricane.
Pinnacle owned two major Gulf Coast properties that sustained heavy damage from Katrina – the Casino Magic in Biloxi, Mississippi and the Boomtown Casino in Harvey, Louisiana, adjacent to New Orleans. The company has since sold its Casino Magic property.
Pinnacle’s lawsuit was one of the few that prevailed on the critical question of whether its insurance policies covered hurricane-related flooding. Many policies written in the Gulf Coast region covered only damages caused by wind, and not the subsequent storm surge and water flooding that destroyed properties.
“The Irell team did a masterful job in navigating our insurance claim,” said Jack Godfrey, Executive Vice President, General Counsel and Secretary of Pinnacle. “The question of wind versus water damage was only one of the many obstacles that our attorneys had to hurdle before we could receive a good settlement.”
Under the terms of the settlement, RSUI will now pay Pinnacle $23.4 million (which is in addition to RSUI’s prior payment of $2,017,908). In total, Pinnacle’s insurance recovery on the claim will be $215,167,908 (net of deductibles totaling $7,122,313).