Along with everyone else in the professional liability insurance industry , I was fascinated by the news that my good friend David Bell, with whom I served on the Professional Liability Underwriting Society (PLUS) Board of Trustees, was leaving Bernuda and his position at Allied World Assurance Company Holdings, to return to Montana, where he would
NY Appellate Court: Excess Insurers Off the Hook Where It Can’t Be Determined if Underlying Insurance Exhausted
In the latest of what is now a lengthening line of cases, on June 12, 2012, the New York Supreme Court, Appellate Division, First Department, applying Illinois law, ruled in a coverage case brought by JPMorgan Chase that owing to settlements by underlying carriers in a professional liability insurance program, excess insurers in the program
Management Liability Insurer Must Defend Insured Accused of Sexual Molestation
The criminal trial in which Jerry Sandusky, the former defensive coordinator of Penn State’s football team, stands accused of sexually abusing at least 10 boys over a 15-year period began Tuesday, June 4, 2012, in Bellefonte, Pa. Sandusky has been charged with forty criminal counts. Sandusky has also separately named as a defendant in a
Rep. Frank Introduces Bill to Prohibit Insurance for Compensation Clawbacks and Civil Money Penalties
On May 30, 2012, Representative Barney Frank introduced a bill entitled the “Executive Compensation Clawback Full Enforcement Act” (here) that by its own terms is designed to “prohibit individuals from insurance against possible losses from having to repay illegally-received compensation or from having to repay civil penalties.” The proposed Act’s appears primarily addressed
D&O Insurance: Officer Not Acting in Insured Capacity When Guaranteeing Company Debt
A company’s D&O insurance policy provides liability protection for the company’s individual directors and officers, but only for their actions undertaken in their capacities as directors and officers. It does not protect them when they are acting in a personal capacity. So, when a company’s CEO signs a loan guaranty for the company, is he
D&O Insurance: Layers and Tiers and Problems
One of the critical issues in putting together a D&O insurance program is the question of how to structure the insurance. Among the more complex issues is how to divide the program between “traditional” D&O insurance coverage and Excess Side A DIC insurance (which in effect provides catastrophic protection for individual directors and officers in
The Impact of the JOBS Act on D&O Liability and Insurance
On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups Act (commonly referred to as the JOBS Act). This legislation, which enjoyed strong bipartisan support in Congress, is intended to ease the IPO process for emerging growth companies and to facilitate capital-raising by reducing regulatory burdens and disclosure obligations. Among other
Guest Post: Professor Squire Responds Concerning “Collective Settlements” of Securities Suits
In a prior post, I discussed Fordham Law Professor Richard Squire’s April 2012 article entitled “How Collective Settlements Camouflage the Costs of Shareholder Litigation” (here). After my post appeared, Professor Squire communicated to me his concerns about my comments regarding his paper. Because his comments and concerns about my post were quite
Can Separate Settlements Improve the Securities Suit Settlement Process?
The negotiated resolution of securities class action lawsuits – and absent dismissal, there is rarely any other types of securities suit resolution – is always complicated and occasionally messy, and often involves inefficiencies and sometimes produces distortions and even excesses. Anyone who has ever been through a securities suit settlement negotiation likely will have had
D&O Insurance: Protecting Directors and Officers Before, During and After Financial Reorganization
The process of restructuring financially distressed companies is complicated and fraught with challenges. Among the many potentially complicating challenges that can arise is the possibility of claims against the company’s management. Because of the risks involved with these kinds of claims, it is critically important that steps are taken to insure that directors and officers