Crown sues insurer Riverstone over refusal to fund $72.5m class action settlement

Crown agreed to settle the class action for $72.5 million in 2025 without making any admissions of wrongdoing. The lawsuit, filed by law firm Maurice Blackburn in 2020, sought damages over Crown's alleged failure to inform the market about its anti-money laundering compliance shortcomings.

The action followed a significant decline in Crown's share price after AUSTRAC announced in October 2020 that it was investigating the business. The state-based governance inquiries that preceded the class action were triggered by reporting that included allegations of VIP Asian junket operators linked to the casino facilitating money laundering, with cash proceeds from organised crime allegedly brought into its Melbourne resort en masse.

Crown, which operates its flagship casino in Melbourne as well as locations in Sydney and Perth, is no longer on the ASX after US private equity firm Blackstone acquired it in 2022 for about $8.9 billion.

The company carried multiple layers of directors and officers insurance, which covers lawsuits brought by shareholders and protects board members and executives from personal financial loss. In the lead-up to the settlement, Crown effectively maxed out its primary policy, with insurer AIG paying out $7.5 million. Additional excess policies were arranged in layers to provide higher coverage.

According to documents filed in the Supreme Court of Victoria, Riverstone International held 50 per cent of the risk on the fourth and fifth level excess policies but refused to pay Crown. Crown claims Riverstone, along with other insurers, told the company it would not honour the policies.

The insurer dispute means the class action settlement continues to generate legal fallout for the casino operator.

Analysis

Why This Matters

The case tests whether excess insurers must pay once a primary directors and officers policy is exhausted, a key question for any large company carrying layered cover.
Crown has already received $7.5 million from primary insurer AIG, but the balance of the $72.5 million settlement is now tied up in litigation.
The outcome could shape how insurers price and administer excess policies, and how strictly they honour them when claims arise.

Background

Crown has been at the centre of sustained scrutiny since reports alleged that VIP Asian junket operators linked to the casino facilitated money laundering, with cash proceeds from organised crime allegedly brought into its Melbourne resort. State-based governance inquiries followed, and AUSTRAC announced in October 2020 that it was investigating the business. Crown's share price declined significantly, and a shareholder class action was lodged two months later. Crown settled that action in 2025 for $72.5 million without admissions of wrongdoing. Blackstone's $8.9 billion acquisition in 2022 took Crown off the ASX, but the insurance arrangements from that era remain in dispute.

Key Perspectives

Crown: Maintains Riverstone is obliged to pay its share of the excess policies, and claims the insurer, along with others, refused to honour the cover when the settlement fell due. Riverstone International: Has refused to pay Crown. The specific grounds for the refusal are not detailed in the available reporting, but the case will test the terms of the fourth and fifth level excess policies it participated in. Skeptics: Excess insurance disputes frequently hinge on exact policy wording and whether the insured met disclosure and conduct conditions. Insurers often contest claims where they believe conditions were breached, and the court will decide whether Riverstone's refusal was valid.

What to Watch

Proceedings in the Supreme Court of Victoria and any early rulings on interpretation of the excess policies.
Whether Crown's other insurers adopt similar positions or agree to contribute to the settlement.
How Crown intends to fund the settlement if the court rules against it in the insurance dispute.

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