In an auditing malpractice case against a Chicago-based accounting firm that allegedly failed to spot fraud by the chief executive of an insurance company that was eventually declared insolvent, a federal judge in Vermont considered whether Illinois would adopt the “deepening insolvency” theory of damages.Courts across the country “are split as to whether deepening insolvency is a viable theory of damages,” U.S. District Judge Christina Reiss explained in a case that the commissioner of the Vermont Department of Financial …