During a panel discussion on the topic of “Advising a Public Company in Crisis” at the ABA Annual Meeting earlier this week, unexpected time constraints forced me to dramatically abbreviate my planned remarks. On the fly, I fashioned what turned into a list of seven pointers for outside counsel who are assisting their clients in
Excess D&O Insurance: What’s Up With That?
As average D&O claims severity has increased and accompanying defense expense has escalated in recent years (about which refer here), excess D&O insurance has become an increasingly critical part of D&O claims resolution. Perhaps because of the increasing claims involvement of excess D&O insurance, it seems as if the number of D&O coverage disputes
Tenth Circuit Takes a Look at D & O Policy Rescission
In a July 25, 2007 opinion (here), the Tenth Circuit examined whether misrepresentations in financial statements incorporated by reference in a D & O policy application could serve as a basis for policy rescission under Utah law.
The case involved a D & O policy issued to ClearOne Communications in 2002. In early
Defense Expense and D & O Claims
One of the increasingly critical features of the current D & O claims environment is the growing likelihood of disputes arising over defense fees. A June 20, 2007 decision in Delaware Superior Court for New Castle County in connection with coverage litigation arising out of the Hollinger International claims reflects many of the recurring aspects
Bankruptcy and D & O Claims Settlements
Ever since “entity coverage” (sometimes called “Side C coverage”) became a part of the standard D & O policy in the mid-90’s, bankruptcy courts have wrestled with the issue whether or not the D & O policy proceeds are property of the estate under Bankruptcy Code Section 541(a) and subject to the
Final Act in Loss Mitigation Insurance Episode
In the final act in the unfolding of a scheme to use “insurance” to misrepresent the financial statements of Brightpoint, on May 25, 2007, a civil jury found against Brightpoint’s former risk manager, Timothy Harcharik, on claims of aiding and abetting civil securities laws violations. (Refer here and here for news coverage.)
The case
Thinking about D & O Claim Expense
In their perceptive and thought-provoking article, “The Missing Monitor in Corporate Governance: The Directors’ & Officers’ Liability Insurer” (here), Professors Tom Baker of Connecticut Law School and Sean Griffith of Fordham Law School, among other things, examine the consequences of the standard D & O policy feature whereby D & O insurers (by
Section 11 Settlement Held Not Insurable “Loss”
On March 14, 2007, in a decision that has important implications for D & O insurers and their policyholders, Judge Gregory Presnell of the federal court in Orlando granted partial summary judgment on behalf of two excess D & O insurers, holding that the $35 million settlement to which CNL Hotels & Resorts agreed to
Opt-Outs, Claims Severity and D & O Insurance Limits
In the latest of the securities class action opt out settlements, California’s teacher pension fund reached a $46.5 million settlement in its separate case against Qwest Communications, its accountants and investment banks, and certain former directors and officers. According to news reports (here), the parties resolved the pension fund’s case, which was
Law Firm Battle Produces Allocation Decision
A dispute arising out of the Clifford Chance law firm’s brief attempt to establish a California presence by recruiting a number of partners from the late, lamented Brobeck, Phleger & Harrison firm has resulted in a ruling under New York law on the proper standard to use in allocating loss between covered and uncovered parties