It is generally understood that under Delaware law, directors enjoy broad rights of indemnification and advancement. The Delaware statutory regime does allow corporations a great deal of flexibility in how they adapt these provisions to their own circumstances. But while these principles are generally understood, it may nevertheless come as a surprise to many that
Excess D & O Insurance: The Exhaustion Trigger
As I have noted in prior posts (most recently here), due to increasing average claims severity and escalating defense expense, excess D & O insurance is an increasingly important factor in the resolution of claims involving directors and officers of public companies. The greater involvement of excess D & O insurance has also meant
D & O Insurance: Consent to Settlement Really is Required
One of the standard provisions of the typical D & O insurance policy is a clause requiring the insurer’s prior consent to settlement. This clause can be the source of tension between carriers and policyholders, and policyholders and their counsel sometimes view the clause as little more than an impediment. However, a March 13, 2008
D & O Insurance and Securities Settlements: Professor Griffith Responds
Last week, I added a post (here) discussing the March 2, 2008 paper entitled “How the Merits Matter: D&O Insurance and Securities Settlements” (here) by Connecticut Law Professor Tom Baker and Fordham Law Professor Sean Griffith. In response to my invitation, Professor Griffith prepared a reply to my comments
D & O Insurance and Securities Lawsuit Settlements
Although there have been some significant exceptions in recent years, it is still generally the case that securities class action settlements are largely funded by D & O insurance. Yet the impact of D & O insurance on the process and ultimate value of securities lawsuit settlements is little understood outside the small world of
About Those Subprime D & O Loss Estimates
Over the past several weeks, several industry observers and analysts have tried to put a number on the insurance industry’s aggregate subprime-related loss exposure. At one end, Bear Stearns on January 24, 2008 estimated the industry’s exposure at $8-9 billion (refer here). By contrast, on February 8, 2008, Lehman Brothers estimated (here)
Offering Underwriter’s Section 11 Settlement Held Covered “Loss”
In an earlier post (here), I discussed the March 14 , 2007 ruling (here) in the CNL Resorts case, in which the federal district court held that an issuing company’s settlement of a claim under Section 11 of the Securities Act of 1933 did not constitute covered "loss" under the company’s
Top Ten D & O Stories of 2007
With the year-end fast approaching, it is time to take a look back and review the top D & O stories of 2007. It was an eventful year, with some important developments that will have implications for the year ahead, and perhaps for years to come. Here are the top stories, with the year’s most
What to Watch Now in the World of D & O
In September 2006, I wrote about the “Four Things to Watch in the World of D & O” (here). As I noted then, the world of directors’ and officers’ liability was (and remains today) characterized by constant change. With the passage of a year’s time, it seems appropriate to check in and survey
Court Rejects D & O Insurer’s Attempted Policy Rescission
In a September 21, 2007 opinion (here), issued following an earlier bench trial, United States District Judge Charles A. Pannell, applying Georgia law, rejected AFC Enterprises’ D & O carrier’s attempt to rescind AFC’s D & O policy and ordered the carrier to pay over $24 million in compensatory damages and prejudgment