Photo of Kevin LaCroix

Kevin M. LaCroix is an attorney and Executive Vice President, RT ProExec, a division of R-T Specialty, LLC. RT ProExec is an insurance intermediary focused exclusively on management liability issues.

As I noted in a recent post (here), a recurring public company D&O insurance coverage issue is whether a claim in which a company is involved qualifies as a “Securities Claim.” This question matters because D&O insurance provides coverage for the corporate entity (as opposed to the insured directors and officers) only for “Securities Claims” as that term is defined in the policy. In a recent decision, a Delaware Superior Court judge concluded that a bankruptcy trustee’s fraudulent transfer claim against Verizon Communications and related entities came within the applicable D&O insurance policy definition of “Securities Claim.” The coverage dispute illustrates the intricate issues that can arise in determining whether a claim qualifies as a “Securities Claim.” A copy of the Court’s February 23, 2021 Opinion can be found here.
Continue Reading D&O Insurance: Bankruptcy Trustee’s Fraudulent Transfer Claim is a “Securities Claim”

Regular readers know that I have been documenting on this blog the recent rise in securities class action lawsuit filings relating to SPAC entities and transactions (most recently here). Along the way, I have suggested that given the sheer amount of SPAC IPO activity during 2020 and 2021, the volume of this type of litigation is likely to increase. The latest evidence supporting this possibility is the securities class action lawsuit filed on February 24, 2021 against MultiPlan Corporation, a health services company that in October 2020 merged into a SPAC. As discussed below, this latest lawsuit has several features that could be recur in future SPAC-related securities lawsuits. A copy of the February 24, 2021 complaint against MultiPlan and other defendants can be found here.
Continue Reading Insurance Services Firm, SPAC Sponsor, and SPAC Execs Hit with Post-deSPAC Securities Suit

Coverage for the corporate entity under public company D&O insurance policies is limited to claims that constitute “Securities Claims” as that term is defined in the policy. A coverage dispute between Calamos Asset Management and its D&O insurer involved the question of whether an underlying breach of fiduciary duty claims alleged in connection with the company’s take-private tender offer meet the policy’s “Securities Claim” definition.

In a February 19, 2021 opinion (here), District of Delaware Judge Maryellen Noreika, applying Delaware law, ruled that the breach of fiduciary duty claims do not fall with the policy’s definition of “Securities Claim” and granted summary judgment for the insurer, largely in reliance on the Delaware Supreme Court’s 2019 decision in the Verizon case, notwithstanding the fact that the definition of the term “Securities Claim” in the Calamos dispute express referred to the “common law,” while the definition in the Verizon dispute did not.
Continue Reading Breach of Fiduciary Duty Claim Not a “Securities Claim” Under D&O Policy

One of the recurring D&O insurance issues is whether an insurer seeking to deny coverage for a claim based on the insured’s late provision of notice must show that the late notice prejudiced the insurer. In the following guest post, Peter Selvin, the chair of the Insurance Coverage and Recovery Department at Ervin Cohen & Jessup LLP, takes a look at a recent federal district court ruling that supports policyholder’s arguments that the notice-prejudice rule applies under certain circumstances. A version of this article previously was published in the LA Daily Journal. I would like to thank Peter for allowing me publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Peter’s article.
Continue Reading Guest Post: New Decision on Late Notice

Most D&O insurance policies specify that the insurer’s advance written consent is required for claim settlement, such consent not to be unreasonably withheld. A frequent insurance coverage battleground issue is whether an insurer’s decision to withhold consent is or is not unreasonable. In the long-running insurance coverage dispute between for-profit education firm Apollo Education Group and its D&O insurer, Apollo contends that the insurer’s refusal to consent to Apollo’s $13.125 settlement of an options backdating-related securities suit was unreasonable. The coverage dispute eventually made its way to the Ninth Circuit, which certified a question of law to the Arizona Supreme Court on the question of the standard of law to be applied to the consent to settlement provision.

In an interesting February 17, 2021 split decision that could have important implications, the Arizona Court held that the objective reasonableness of the insurer’s decision to withhold consent is to be assessed from the perspective of the insurer, not that of the insured. A copy of the Arizona Supreme Court’s opinion can be found here.
Continue Reading Arizona Sup. Ct.: Reasonableness of Insurer’s Refusal to Consent to Settle Determined from Insurer’s Perspective

In the latest SPAC-related securities class action lawsuit, a plaintiff shareholder has filed a securities class action lawsuit against a post-SPAC-acquisition biopharma company in which the plaintiff claims that the risk of the company’s post-merger clinical trial setback should have been unearthed in the pre-merger due diligence process. As discussed below, this lawsuit may prefigure some of the likely patterns for future SPAC-related securities litigation.
Continue Reading Post-SPAC Acquired Biopharma Firm Hit with Securities Suit

Readers of this blog may have noted that from time to time I refer to “the D&O Insurance industry,” or to the “Professional Lines Insurance industry” but may not be sure what I was talking about. The good news is that for anyone who wants or needs to find out about the industry, there is now a book for that. It is called “Professional Lines Insurance: An Oral History,” with the subtitle “The People and Companies Who Built a Niche.” The book is available here. It would be conventional to say that the book was “written by” industry veteran Larry Goanos, but that would suggest that this is a conventional book – which it is not. It is more like a literary form of performance art with the professional lines insurance industry as its subject, and with Larry’s own personal industry experience as the central organizing theme. It is also a detailed account of many of the people who made the industry what it is today.
Continue Reading Book Review: “Professional Lines Insurance: An Oral History”

As I have detailed in a series of post on this blog (most recently here), over the last year plaintiffs’ lawyers have filed nearly 30 COVID-19-related securities class action lawsuits. While the plaintiffs’ lawyers’ have been quick to file these cases, it remains to be seen how the claims will fare. Indeed, in January, in the first case to reach initial pleading hurdles, the Court granted the defendants’ motion to dismiss (as discussed here). However, in a more recent ruling one of the first of the COVID-19-related securities suits to be filed, the Court has denied the defendants’ motion to dismiss in significant part. The February 16, 2021 opinion of Eastern District of Pennsylvania Judge Gerald J. Pappert in the securities lawsuit pending against Inovio Pharmaceuticals can be found here.
Continue Reading Dismissal Motion Largely Denied in COVID-19-Related Securities Suit Against Vaccine Company

2020 was an eventful year in the world of corporate and securities litigation. In the following guest post,  attorneys from the Haynes and Boone LLP law firm take a look at the most important corporate securities litigation developments from 2020. A version of this article previously was published as a Haynes and Boone client alert. I would like to thank the authors for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
Continue Reading Guest Post: 2020 Year in Review – Securities Litigation

One issue I have been monitoring on this site recently is the apparent revival of claims against corporate directors and officers for breach of the duty of oversight. Up until now, my focus has been on developments in Delaware’s courts. However, a recent Ohio federal district court decision in an opioid-related derivative suit against the board of the pharmaceutical distribution firm Cardinal Health examined issues addressed sufficiency of breach the duty of oversight allegations under Ohio law.

In an interesting February 8, 2021 decision (here) highlighting the fact these issues are relevant under other states’ laws, Southern District of Ohio Judge Sarah D. Morrison denied the defendants’ motion to dismiss the plaintiff’s breach of the duty of oversight claims against the Cardinal Health board, although she granted the defendants’ motion to dismiss the plaintiffs’ claim for waste of corporate assets.
Continue Reading Court Sustains Opioid-Related Duty of Oversight Breach Claims Against Cardinal Health Board