A 2014 fire at 245 West 34th Street in Manhattan destroyed more than 2,300 archived gowns and dresses belonging to Lebanese fashion designer Reem Acra. The loss included the company’s spring bridal collection, hundreds of evening gowns, and other inventory. A court determined that the fire was caused by construction work performed by MJR Construction.
In June, a judge awarded Acra $20.9 million in damages related to the incident, a sum that grew to $38.7 million after accounting for a decade of interest. The designer has sought to collect on this judgment from various parties, including landlord Meyer Chetrit’s Chetrit Group and now the insurance companies involved.
Acra is now pursuing claims against Burlington Insurance Co. and Alterra America Insurance Co., alleging that they are attempting to avoid paying their share of the judgment by asserting they were defrauded by their policyholder.
“This isn’t just an issue of an insurance company trying not to pay, but an issue of real deceptive behavior going on — not just against our client, but against the City of New York,” said Charles Wollman, an attorney for Reem Bridals with Amini LLC. “They’re making it look like there was fraud to avoid coverage under the policy.”
The insurers argue that Michael J. Russell was listed as CEO and owner on their policies but claim his father Steven Russell actually ran MJR Construction and forged Michael’s signature on legal documents—grounds they say should void coverage. When MJR did not contest these allegations in court, a judge sided with the insurers.
Acra’s legal team disputes this narrative, stating that Michael Russell was involved with MJR Construction; his notarized signature appeared on contractor applications alongside his driver’s license, he received paychecks from the firm, and insurer agents signed several disputed documents.
According to Acra’s complaint, even after alleged fraud came to light, Burlington arranged legal defense for MJR during depositions. Despite claims from insurers about lack of cooperation from the Russells during investigations, both Steven and Michael Russell participated in phone calls with them.
Acra is seeking $7 million plus interest from Burlington Insurance Co. and Alterra America Insurance Co., whose parent companies IFG Companies (for Burlington) and Markel (for Alterra) did not respond to requests for comment. Attempts to reach Steven or Michael Russell were unsuccessful.
Separate proceedings are ongoing as Acra tries to collect on Chetrit Group’s portion of the judgment regarding ownership of the building where the fire occurred.
