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
Seven Ways Counsel Can Help Clients with D&O Claims
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