Houston billionaire Tilman Fertitta sues insurance companies over COVID-19 losses

Houston billionaire Tilman Fertitta is facing multiple lawsuits alleging that insurance companies owe businesses money for financial losses caused by the COVID-19 pandemic, and two judges have sided with him.

Earlier this year, several of Fertitta’s businesses — including Landry’s and Golden Nugget — filed two lawsuits in Louisiana against several insurance companies, claiming that losses the businesses incurred during the COVID-19 pandemic should have been covered by their insurance. As COVID-19 spread across the United States and local governments imposed lockdowns and restrictions to prevent conflict in early 2020, Fertitta laid off 45,000 workers and borrowed $300 million to keep Landry alive. He then offered a free lunch to the workers and put $1 million in a fund to help them.

In July, two Louisiana state judges granted summary judgments in favor of Fertitta’s businesses, not finding that the businesses owed money.

Houston Rockets owner Tilman Fertitta leaves after discussing the upcoming NBA draft with the media Tuesday, June 21, 2022, at Practice Court Toyota Center in Houston.Yi-Chin Lee/Staff Photographer

The insurance companies have requested that the case be heard in Texas, according to Fertitta’s spokeswoman, and have notified their counsel that they also intend to appeal in Louisiana.

Great American Insurance, Lexington Insurance and National Indemnity Company did not respond to requests for comment. Chubb, Axis Surplus Insurance and American Insurance Group declined to comment.

In July 2020, the Houston Rockets – also owned by Fertitta – sued an insurance provider in Rhode Island after the provider refused to cover losses for games canceled due to the pandemic.

“The loss of performance is not comparable to a building losing its roof in a tornado or hurricane,” a Rockets attorney told The Houston Chronicle at the time.

In March 2021, the judge ruled that divided many of Rocket’s claims into separate trials. The case is still pending.

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Louisiana is home to several of Fertitta’s businesses, such as the Golden Nugget Lake Charles casino. The state also has a good legal center for COVID-19 insurance. In another case in June, the appeals court in Louisiana side with the argument that COVID-19 contamination in restaurants damages property and should be covered by insurance companies. The 3-2 decision stated that some types of non-physical damage such as asbestos and carbon-monoxide pollution have been counted as property damage.

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Some of those losses should be covered by insurance, according to Fertitta’s lawyers and two Louisiana judges who ruled in their favor.

“As you have agreed to with our insurance companies, we filed lawsuits in Louisiana where insurance carriers wrongfully refused to honor our laws and demands.” Steve Scheinthal, vice president and general counsel for several of Fertitta’s companies, said in a statement. “Louisiana courts have reviewed our policies and laws and ruled in favor of our insurance coverage,” he said.

Fertitta isn’t the only Houston business owner to take their insurance company to court for failing to cover losses. In October 2020, the Houston Livestock Show and Rodeo they also reported that their insured property was damaged after being ordered to be detained by the local and state authorities. The case, filed in Harris County, remains pending.