In the following guest post, Sarah Abrams, Head of PL Claims at Bowhead Specialty Underwriters, takes a look at the D&O insurance underwriting and claims implications of private equity investment in managed care organizations. I would like to thank Sarah for allowing me to publish her 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 Sarah’s article.
Continue Reading Guest Post: PE Investment in Healthcare and Impact to Managed Care Organization D&O
Companies in the pharmaceutical industry are frequent targets of securities class action lawsuits. In the following guest post, Tony Kriesel, Claims Specialist with IQUW; Elan Kandel, a Member of the Bailey Cavalieri law firm; and James Talbert, an Associate at Bailey Cavalieri, take a look at the reasons for the pharmaceutical industry’s high securities litigation frequency experience and at the implications of the lawsuit frequency for pharmaceutical companies and their insurers. They also consider the significance of the interrelated claims provision typically found in D&O insurance policies for securities claims involving pharmaceutical companies. 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
The filing of data breach and other cybersecurity incident-related shareholder derivative lawsuits against corporate boards is nothing new; plaintiffs’ lawyers have been filing these kinds of claims now for several years. However, in recent months, the plaintiffs’ lawyers have shown an increasing inclination to file these claims based on allegations of breach of the duty of oversight. The latest example of this type of claim is the shareholder derivative suit filed this week against the board of T-Mobile USA. Although the plaintiff’s complaint does not expressly use the words “breach of the duty of oversight” or refer to “Caremark duties,” the complaint does refer to the board’s alleged “failure to monitor” and to the board’s alleged failure “to heed red flags” – the very kind of allegations that are at the heart of breach of the duty of oversight claims. A copy of the plaintiff’s complaint in the November 29, 2021 lawsuit can be found 
Several years ago, when it became clear that plaintiffs’ lawyers were going to file merger objection lawsuits in connection with essentially every M&A transaction, the D&O insurers responded by adding a separate, larger retention for M&A-related claims. The larger M&A-related claim retention quickly became pretty much a standard feature of public company D&O insurance policies. However, because the M&A claim retention is in many instances substantially larger than the retention that would otherwise apply, the question of whether the larger retention applies to a particular claim can be a significant one. In a recent case, the Delaware Superior Court addressed a D&O insurance coverage dispute in which, among other things, the insurers and the policyholder disagreed on whether the larger M&A-related claim retention applied to the underlying litigation. In an interesting November 23, 2021 opinion (
In the latest development in the long-running saga involving the efforts by J.P. Morgan to obtain D&O insurance coverage for the $140 million “disgorgement” that its predecessor-in-interest, Bear Stearns, paid to settle SEC market-timing allegations, the New York Court of Appeals (the state’s highest court) has reversed the intermediate appellate court’s ruling that the payment represented a “penalty” for which coverage is precluded. The Court of Appeals rejected the intermediate appellate court’s conclusion, made in reliance on the U.S. Supreme Court’s 2017 Kokesh decision, that a “disgorgement” payment to the SEC is a “penalty.” The Court of Appeals held that Kokesh did not control, and that because the payment was compensatory in nature, it did not represent a “penalty” for which coverage is precluded under the policies. The Court’s November 24, 2021 opinion can be found 
Editor’s Note: This installment of Sunday Arts reproduces a portion of a 
By almost any measure, Fiscal Year 2021 (ended September 30, 2021) was a watershed year in the history of the SEC’s Whistleblower program. According to the recently published annual report of the SEC’s Whistleblower Office, during FY 2021 the agency made the highest annual number of awards in the history of the program, both in terms of dollars and individuals awarded. Indeed, during FY 2021 the agency made more whistleblower awards than in all of the program’s prior years combined. The SEC’s Office of the Whistleblower’s November 15, 2021 Report to Congress can be found 
In a