Comdex: Terrorism resulted in $52.4 million loss

Monday, Aug. 19, 2002 | 11:05 a.m.

The producer of the annual Comdex computer convention in Las Vegas and the event's insurer have sued each other over losses the show sustained when attendance plummeted after the September terrorism.

Commerce and Industry Insurance Co. sued Key3Media Group Inc., Los Angeles, in the Supreme Court of New York July 1 for declaratory relief over the company's event cancellation policy covering the 2001 Comdex event.

Key3Media countered with a breach-of-contract suit filed July 31 against CIIC in Los Angeles County Superior Court. The Key3Media suit seeks $9.1 million in compensatory damages connected with the Networld+Interop computer show in Atlanta and $52.4 million for the 2001 Las Vegas Comdex show.

The dispute, disclosed in a Securities and Exchange Commission filing last week, stems from CIIC's response to an insurance claim for losses the company reported at the two trade shows the company said were in connection with the Sept. 11 attacks.

Attendance was down substantially from previous years at both shows and analysts have attributed the downturn to weakness in the high-tech industry in 2001 as well as fear generated by the terrorist attacks.

Key3Media, which produces several computer shows worldwide, recently had its stock delisted from the New York Stock Exchange and saw its stock price plummet to a 52-week low of 1 cent a share on July 30.