The D&O Diary

The D&O Diary

A PERIODIC JOURNAL CONTAINING ITEMS OF INTEREST FROM THE WORLD OF DIRECTORS & OFFICERS LIABILITY, WITH OCCASIONAL COMMENTARY

Tag Archives: Disgorgement

D&O Insurance: Settlement of Antitrust Claim for Underpaid Wages Not Excluded “Disgorgement”

Posted in D & O Insurance
A settlement of an antitrust lawsuit alleging that a group of hospitals conspired to underpay their nurses did not represent excluded “disgorgement” and therefore was not excluded from coverage under William Beaumont Hospital’s management liability insurance policy, according to a January 16, 2014 Sixth Circuit decision. The opinion will likely be of particular interest to … Continue Reading

Guest Post: J.P. Morgan Decision Curtails the Phantom “Restitution Defense” to D&O Coverage

Posted in D & O Insurance
As I discussed in a recent post (here), in a June 11, 2013 opinion, the New York Court of Appeals held that J.P Morgan (which had acquired Bear Stearns) is not barred from seeking insurance coverage for a $160 million portion of an SEC enforcement action settlement labeled as “disgorgement,” where Bear Stearns’ customers rather … Continue Reading

“Disgorgement” Not Precluded from D&O Insurance Coverage Where Firm Did Not Profit from Improper Conduct

Posted in D & O Insurance
In a June 11, 2013 opinion, the New York Court of Appeals held that Bear Stearns is not barred from seeking insurance coverage for a $160 million portion of an SEC enforcement action settlement labeled as “disgorgement,” where Bear Stearns’ customers rather than Bear Stearns itself profited from alleged misconduct.  The Court’s opinion reversed the ruling … Continue Reading

D&O Insurance: “Disgorgement” Paid in SEC Settlement Held Not Covered

Posted in D & O Insurance
Carriers generally contend that  insurance does not cover amounts that represent “disgorgement” or that are “restitutionary” in nature. But what makes a particular payment a “disgorgement”?  In a December 13, 2011 opinion (here), the New York Supreme Court, Appellate Department, First Division, held that amounts Bear Stearns paid in settlement of SEC late trading and market … Continue Reading

D&O Insurance: Disgorgement of Contingent Commissions Not Covered “Loss”

Posted in D & O Insurance
An insurance broker’s settlement of claims for disgorgement of undisclosed contingent commissions does not represent covered loss under a combined lines professional liability insurance policy, according to a December 3, 2010 decision of the Illinois (Cook County) Circuit Court. A copy of the December 3 opinion can be found here.   Background Aon Corporation was … Continue Reading