The Insured vs. Insured exclusion is one of the standard exclusions in D&O insurance policies (although these days at least in public company D&O insurance policies, the exclusion is framed as an Entity vs. Insured exclusion). Disputes often arise with respect to the Insured vs. Insured exclusion. In the following guest post, Ivan Rodriguez, Underwriting Lead with CelerityPro, Elan Kandel, Member, Bailey Cavalieri LLC and James Talbert, Associate, Bailey Cavalieri LLC, take a look at a situation that frequently results in Insured vs. Insured coverage disputes – that is, so-called “mixed” actions, in which the plaintiffs include both insured and uninsured persons. 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. Continue Reading Guest Post: Divergent Trends Regarding Application of the Insured vs. Insured Exclusion for Mixed Actions

The directors’ and officers’ liability environment is always changing, but 2021 was a particularly eventful year, with important consequences for the D&O insurance marketplace. The past year’s many developments also have significant implications for what may lie ahead in 2022 – and possibly for years to come.  I have set out below the Top Ten D&O Stories of 2021, with a focus on the future implications. Please note that on Thursday, January 13, 2022 at 11:00 AM EST, my colleague Marissa Streckfus and I will be conducting a free, hour-long webinar in which we will discuss The Top Ten D&O Stories of 2021. Registration for the webinar can be found here. I hope you will please join us for the webinar. Continue Reading The Top Ten D&O Stories of 2021

The number of federal court securities class action lawsuits filed during 2021 declined significantly compared to the number filed in 2020, and the number of 2021 filings was sharply below the elevated number of securities suits filed each year during the period 2017-2019. The most significant factor in the 2021 drop-off was the decline in the number of federal court merger objection class action lawsuit filings during the year, although there were other factors at work as well. Though the number of filings in 2021 declined relative to the elevated number of annual filings during period 2017-2020, the number of 2021 filings was above longer-term historical annual filings levels prior to 2017, as discussed below. Continue Reading Securities Filings Declined in 2021 Relative to Recent Elevated Years, Closer to Long-Term Levels

As long-time readers of this blog know, one of the long-range concerns in the D&O insurance industry is the possible exposures of corporate directors and officers to liability claims arising from climate change (as discussed most recently here). In the following guest post, attorneys from the Legalign Global Alliance member firms take a comprehensive look at the climate change-related risks and exposure that corporate directors and officers may face, as well as at the climate change-related D&O claims developments in a variety of different countries. A version of this article previously was published as a Legalign Global 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article. Continue Reading Guest Post: D&O Exposures to Climate Change Risk

Barry Buchman
Michael Scanlon

As I have noted in prior posts on this site (most recently here), the so-called “bump up” exclusion in D&O insurance policies is a frequent source of coverage litigation between D&O insurance policyholders and their insurers. The “bump up” exclusion precludes coverage for increased amounts participants in an M&A transaction agree to pay in the transaction in order to settle a M&A-related lawsuit. In the following guests post, Barry Buchman and Michael Scanlon take a look at the issues that can arise in disputes over the application of the “bump up” exclusion and consider the practical consequences. Barry is partner and Michael is counsel in the insurance recovery group at the Haynes and Boone law firm. I would like to thank Barry and Michael 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. Continue Reading Guest Post: Avoiding Bumps in the Road to Coverage: Limitations on the “Bump-Up Exclusion”

As I have noted on this site (most recently here), electric vehicle companies that have merged with publicly traded SPACs have become a favored target for plaintiffs’ securities lawyers. In the latest example of this phenomenon, on December 23, 2021, a plaintiff shareholder filed a securities class action lawsuit against the EV company Faraday Future Intelligent Electric, Inc., which merged with a SPAC on July 21, 2021. Like many of the EV companies that have been sued, Faraday Future’s stock price dropped after it was the subject of a short seller report. A copy of the complaint against Faraday Future can be found here. Continue Reading And Again: Another Post-SPAC Merger EV Company Hit with Securities Suit

In an opinion written in unusually direct language, a federal district court has denied the motion to dismiss in a coronavirus-related securities class action lawsuit filed against a vaccine development company. However, the motion to dismiss was granted with leave to amend as to the vaccine company’s major outside shareholder. The significant context of the pandemic itself and the swirl of media coverage surrounding it proved to be a significant factor in the court’s denial of the motion to dismiss as to the company defendants. The court’s December 22, 2021 opinion in the Vaxart securities litigation can be found here. Continue Reading Coronavirus-Related Securities Suit Against Vaccine Company Survives Dismissal Motion

In the latest securities class action lawsuit to be filed against a post-SPAC-merger electric vehicle company, a plaintiff shareholder has filed a securities suit against the EV company Arrival SA, following the company’s announcement in November 2021 of a slowdown in its production schedule and of the company’s need to raise additional capital. As discussed below, the new lawsuit against Arrival has several characteristics in common with other SPAC-related securities suits that have been filed this year. A copy of the complaint that was filed against Arrival on December 22, 2021 can be found here. Continue Reading Yet Another Post-SPAC-Merger Electric Vehicle Company Hit with Securities Suit

As I monitored the coronavirus-related securities litigation as it has been filed since March 2020, I had observed that the cases generally fell into one of three categories: cases involving companies that had experienced a coronavirus outbreak in their facilities; companies that had claimed that they would be able to profit from the pandemic; and companies whose operations or finances were disrupted by the pandemic. Over the last several weeks, I have observed a new coronavirus-related variant, a fourth category of cases involving companies that had prospered at the outset because of pandemic restrictions, but whose fortunes ebbed as pandemic restrictions eased. Now, two more of these “fourth category” variant cases have been filed, one involving Docusign and one involving Chegg, as detailed below. Continue Reading Two New Cases of the Latest Coronavirus-Related Securities Suit Variant Filed

Nikola, the electric vehicle company that became a publicly traded company through a June 3, 2020 merger with a SPAC, has reached an agreement to pay $125 million to settle proceedings the SEC brought against the company relating to misrepresentations its former CEO Trevor Milton and the company made about the company’s EV production capabilities. In the settlement, the company neither admitted nor denied the SEC’s allegations. The SEC’s December 21, 2021 press release about the settlement can be found here. The SEC’s December 21, 2021 order instituting cease and desist proceedings against Nikola can be found here. The company’s December 21, 2021 press release about the settlement can be found here. Continue Reading Nikola Settles SEC Proceedings for $125 Million