In a June 30, 2010 opinion (here), a three-judge panel of the Second Circuit reversed the lower court’s ruling that coverage under a directors and officers liability insurance policy for an underlying claim was precluded by the policy’s "insured vs. insured" exclusion, holding that the D&O policy at issue was "ambiguous" under Virginia
More About Excess D&O Insurance and the Exhaustion Trigger
One of the recurring D&O insurance coverage issues is the question of excess D&O insurers’ obligations when the underlying insurers have paid less than their full policy limits as a result of a compromise between the underlying insurers and the policyholder.
In the latest of a growing line of recent cases examining these issues
Sarbanes-Oxley Act Clawbacks and D&O Insurance
The SEC has made it clear that it intends to use Section 304 of the Sarbanes-Oxley Act to "clawback" compensation from CEOs and CFOs of companies that restate their financial statements, even if the individuals are not alleged to have engaged in any wrongdoing. A recent district court opinion confirms that the statute gives the
Allen Stanford, D&O Insurers Spar Over Defense Issues
The strange sequence of legal events surrounding R. Allen Stanford has taken yet another bizarre turn. The latest developments began earlier last week when Stanford yet again sought to fire his criminal defense lawyers. Then on May 21, 2010, Stanford, representing himself pro se in coverage litigation arising out of his and fellow criminal defendants&rsquo
Bankruptcy and D&O Insurance
According to statistics compiled by the American Bankruptcy Institute, over 60,000 businesses filed for bankruptcy in 2009, the highest annual number of business-related bankruptcies since 1993. By way of comparison, the 2009 business bankruptcy filing levels were nearly 200% greater than in 2006. All signs are that these bankruptcy filing levels have continued unabated
Second Circuit Affirms Excess D&O Insurers’ Coverage Denial Based on Prior Knowledge Exclusion
In a March 23, 2010 Summary Order (here), the Second Circuit affirmed the March 2, 2009 ruling of Southern District of New York Judge Gerald Lynch, in which he held that the excess insurers’ prior knowledge exclusion precluded coverage under their policies for claims brought against former Refco directors and officers.
Two Appellate Courts Consider D&O Insurers’ Obligation to Advance Defense Expenses
Within the space of just a few days, two federal appellate courts – the Fifth and Sixth Circuits – issued separate opinions consider D&O insurers’ obligations to advance defense expenses. The Fifth Circuit entered its March 15, 2010 decision in the high-profile Stanford Financial insurance coverage dispute. The Sixth Circuit’s March 11, 2010 opinion was
Data Privacy and Security: The “Stealth Issue” of 2010?
Data security and privacy could be the "stealth issue of 2010," according to a recent report. Despite the intense focus on financial and related issues during the current economic crisis, a variety of legislative and regulatory initiatives suggest that data privacy and security issues necessarily will become a top corporate priority. These developments have important
Guest Post: More About D&O Insurance Coverage for Special Litigation Committee Expenses
In recent posts (here and here), I have discussed the issues surrounding coverage under D&O insurance policies for investigative costs and special litigation committee expenses. In response to these posts, readers Jeff Kiburtz and Cindy Forman of the Santa Monica law firm of Shapiro Rodarte & Forman have submitted the following guest blog post.
Can Insurers Really Just Cancel Bank D&O Insurance?
The problems facing many banks in the current economic environment are well-documented. For troubled banks’ directors and officers, the banks’ D&O insurance may represent a last line of protection. But what if the insurers could just cancel the policies? Surprisingly, many bank D&O insurers have that right under their policies, and while cancellation is rare