First National Bank in Manitowoc was awarded $2.4 million in its lawsuit against an insurance company which refused to pay on a policy insuring the bank against losses caused by forged or counterfeit documents. The bank incurred losses of $1.75 million in October 2001 resulting from forged automobile leases submitted to the bank by West Town Auto, Inc. However, the bank’s insurer, Cincinnati Insurance Co., refused to make any payments on an insurance policy it sold to the bank which provided coverage for forged or counterfeit documents, claiming the bank’s losses were not directly caused by the forged auto leases. The bank sued Cincinnati Insurance Co., and the matter was first heard in U.S. Federal Court in Green Bay, which agreed with the bank’s position and awarded damages to the Bank. However, Cincinnati Insurance Co. appealed to the Federal Circuit Court of Appeals in Chicago. On Friday, that court completely upheld the bank’s right to recovery on the policy stating, “Because the bank acted upon the kinds of documents that it would normally act upon in its business,” coverage was required.

The Court also awarded the bank interest on its claim resulting in a total award to the Bank of over $2.4 million.

Thomas J. Bare, Chief Executive Officer of the bank, stated, “The legal battle was long and vigorously contested by the insurance company. We believed, from the start, our position was sound, and we stayed the course in the litigation. We are gratified the Courts have endorsed the bank’s conduct and legal position throughout this entire matter.”

First National Bank in Manitowoc is a wholly owned subsidiary of First Manitowoc Bancorp, Inc. (OTC: FMWC). First National Bank in Manitowoc is an independent community bank, in business since 1894, with fifteen locations throughout Manitowoc, Brown, Calumet, and Sheboygan counties. The bank has approximately 215 employees. Total assets exceed $667 million dollars. To learn more about First National Bank visit www.bankfirstnational.com.

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