Lee Farkas, the criminally convicted former Chairman and majority shareholder of the defunct Taylor Bean and Whitaker Mortgage Corporation, must repay the nearly $1 million in defense fees the company’s D&O insurer had advanced on his behalf, according to an April 11, 2013 Fourth Circuit opinion. The terse three-page appellate opinion adopts the ruling of
Towers Watson Releases 2012 D&O Insurance Survey
By now, many readers may have seen the 2012 Towers Watson D&O insurance survey, entitled “Directors and Officers Liability: 2012 Survey of Insurance Purchasing Trends,” which can be here. (I am only belatedly posting a link to the survey now owing to my travel schedule last week, when Towers Watson released the survey report).
D&O Insurance: Actions Not Undertaken in an “Insured Capacity” Not Covered
Many organizations purchase management liability insurance to provide liability and defense cost protection for their directors and officers. But the management liability insurance protects the individuals only for their actions undertaken in an “insured capacity.” The policies are not intended to not protect them for actions they undertake in a capacity other than as a
D&O Insurance: So What is a “Securities Claim”?
The modern public company D&O insurance policy provides coverage not only for the directors and officers of the company but also for the company itself – however, in the public company D&O insurance policy, the entity coverage applies only to securities claims, a limitation that sometimes leads to disputes whether or not a particular matter
D&O Insurance: Advancing Defense Costs in Bankruptcy
After entity coverage began to be added to the D&O insurance policy a couple of decades ago, a recurring problem in the bankruptcy context was whether or not the D&O policy proceeds were property of the estate under Bankruptcy Code Section 541(a) and subject to the automatic stay under Bankruptcy Code Section 362.
D&O Insurance: Bank Directors’ Notice of FDIC Failed Bank Suit Held Timely
On February 5, 2013, in a detailed opinion exploring the nuances of a D&O policy’s extended reporting period provisions, Western District of North Carolina Judge Henry Herlong Jr. determined that the directors of the failed Bank of Ashville of Asheville, North Carolina timely provided their D&O insurer notice of the FDIC’s lawsuit against them as
InSights: Top Ten D&O Stories of 2012
The past year included dramatic and important developments involving elections, tragedies and natural disasters. While there was nothing in the world of Directors and Officers Liability to match this drama, it was nevertheless an eventful year, with many significant developments. In the latest issue of InSIghts, which can be found here, I take
Book Review: “Director and Officer Liability in Financial Institutions”
A distinctive feature of the current wave of FDIC failed bank litigation is the aura of déjà vu surrounding the suits. The resemblance of the current lawsuits to those filed during the S&L crisis is uncanny. And not only are the suits similar, but in many instances they even involve the same lawyers as last
D&O Insurance: “Ambiguity” Whether Insured vs. Insured Exclusion Bars Coverage for FDIC’s D&O Claims
As I have discussed in prior posts (refer here for example), one of the recurring D&O insurance coverage issues that has arisen in connection with the FDIC’s failed bank litigation is the question whether or not the FDIC’s claims as receiver for the failed bank against the bank’s former directors and officers trigger the D&O
Top Ten D&O Stories of 2012
The year just finished included dramatic and important developments involving elections, tragedies and natural disasters. While there was nothing in the world of directors’ and officers’ liability to match this drama, it was nevertheless an eventful year in the world of D&O, with many significant developments. By way of review of the year’s events, here