In the following guest post, Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty, takes a look at the D&O risks that can arise from crypto-adjacent firms’ use “liquidity pools,” in view of the D&O claims involving the bankrupt digital token firm, SafeMoon. My thanks to Sarah for allowing me to publish her article as a guest post on this site. Here is Sarah’s article.Continue Reading Guest Post: Liquidity Pool Fraud and D&O Risk
As the story developed last month surrounding the spectacular collapse of auto-parts giant First Brands Group, I kept waiting for the lawsuit. The tale of the CEO’s supposed lavish personal spending, as well as the company’s massive debt and apparently missing funds, seemed scripted for a securities class action complaint. The securities suit I thought surely was coming never materialized – because, it turns out, Patrick James, the company’s founder and CEO, was also its sole equity owner. So, no shareholder suit. Which is not to say that there would never be a lawsuit.
Indeed, last week, the perhaps inevitable lawsuit did materialize, but not as a securities suit; rather, the lawsuit is in the form of an adversary proceeding against the former CEO and his affiliated entities brought by the company as debtor in its bankruptcy proceeding. And the complaint? It’s a doozy. And as discussed below, it also raises some interesting D&O insurance coverage questions as well.Continue Reading First Brands Sues Its Founder for “Grievous Misconduct”
Sometimes seemingly subtle policy wording differences can significantly affect the court’s analysis of key policy clauses. The significance of the wording subtleties sometimes is best seen by comparing the wording to equivalent provisions in different policies. That was the case in recent proceedings in which an excess insurer sought to compel arbitration of an underlying coverage dispute. As discussed below, the court found that the language of the specific arbitration provision in dispute did not apply either to the parties or the dispute involved in the underlying coverage lawsuit. The ruling, in which the court applied New York law, can be found here.Continue Reading Insurer Cannot Compel Arbitration in Reliance on Narrow Arb Clause Wording