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The preclusive effect of the “bump-up” exclusion typically found in most D&O insurance policies has been frequently litigated topic. In the following guest post, Barry Buchman, Michael Scanlon, and Jake Todd review recent case law developments relating to the scope of the bump-up exclusion’s preclusive effect. Buchman is a partner, Scanlon is a counsel, and Todd is an associate in the insurance recovery group of Haynes and Boone, LLP. This article is an update of the authors’ prior guest post about the bump-up exclusion on this site, here. I would like to thank the authors for allowing me to publish their author 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: Bump-Up Exclusion: Recent Delaware Decisions Support Policyholders

In late March, in order to try to stop a perceived flood of Delaware companies reincorporating in other states (in particular, Nevada and Texas), the Delaware legislature enacted a significant re-write of important sections of its General Corporation Law (DGCL).  Even though it has just been a few short weeks since the Delaware legislation was enacted, it is not too early to start asking whether the legislative changes will stop Delaware companies from reincorporating in other states. As discussed below, early indications seem to suggest that notwithstanding the legislative changes, at least some Delaware corporations will continue to seek to reincorporate elsewhere.Continue Reading Will Delaware’s Recent Corporate Law Revisions Stop Reincorporations?

On Tuesday, March 25, 2025, the Delaware House of Representatives passed S.B. 21, the legislation designed to try to fight back against the move by some Delaware companies to reincorporate elsewhere, particularly in Texas or Nevada. The Delaware Senate previously passed the bill, which has been called the “most significant single-year revision of Delaware’s corporate code since at least 1967.   Delaware Governor Matt quickly signed the legislation the same day as the House passed the bill. While the legislation is primarily intended to try to stem the departures of Delaware companies to other states, it could also have a significant impact on future litigation in the state, as discussed below.Continue Reading Delaware Bill Meant to Stem Corporate Departures Enacted

In the immediate aftermath of the Delaware Supreme Court’s 2019 decision in Marchand v. Barnhill, which revitalized so-called Caremark claims for breach of the duty of oversight, one question I was asked was whether claimants might seek to assert breach of the duty of oversight claims in the context of cybersecurity and data privacy issues. Claimants did, in fact, subsequently raise Caremark claims in connection with the high-profile date breaches at Marriott and SolarWinds, but in each case, the Delaware Chancery Court granted the defendants’ motions to dismiss (as discussed here and here, respectively), raising questions about the viability of duty of oversight claims in the cybersecurity context.

Notwithstanding the less than promising track record for these kinds of claims, in a recent article, NYU Law Professor Jennifer Arlen argues that cybersecurity-related claims for breach of the duty of oversight should support Caremark liability in at least one class of cases – that is, cases relating to companies for whom cybersecurity is a “mission critical legal risk” and in which it is alleged that the company had inadequate cybersecurity that risked (and later caused) substantial harm to businesses and government agency customers, and that the company had misled the customers through statements that were designed to defraud the customers into believing that the company’s cybersecurity systems were materially better than they were. Professor Arlen’s March 18, 2025, post on the Harvard Law School Forum on Corporate Governance about Caremark claims in the cybersecurity context can be found here.Continue Reading Cybersecurity and the Duty of Oversight

Regular readers know that a recurring topic on this site is the question of the proper scope of the contractual liability exclusion found in many professional liability and management liability insurance policies. In prior posts I have argued that insurers sometimes apply the exclusion overly-broadly so as to exclude matters I believe should otherwise be covered under the policy. A recent Delaware Superior Court decision once again considered these issues in the context of an underlying qui tam action alleging violations of federal law. As discussed below, the court concluded that the applicable policy’s contractual liability did not preclude coverage for the underlying claim. A copy of the Delaware Superior Court’s March 12, 2025, opinion in the case can be found here.Continue Reading Del. Court: Contract Exclusion Does Not Preclude Coverage for Qui Tam Action

The typical D&O insurance policy provides coverage, subject to all of its terms and conditions, for an insured’s payment of “Loss.” The policy typically provides that “Loss” includes settlements. But what happens if in settling a lawsuit a policyholder issues stock rather than paying cash? Does the stock issuance represent “Loss” within the meaning of the policy? In an interesting recent opinion, the Delaware Superior Court held that AMC Entertainment Holding’s issuance of stock in connection with the settlement of a stockholders’ claim did represent “Loss” within the meaning of the applicable policy. As discussed below, the court’s opinion raises some interesting questions. The Delaware court’s February 28, 2025, opinion can be found here.Continue Reading Is Stock Issuance in Connection with a Settlement “Loss”?

The 2019 merger between Viacom and CBS to form ViacomCBS (later renamed Paramount Global) generated extensive litigation that ultimately settled. The Merger — and the Merger-related litigation — followed events involving the two companies going back to 2016, and in fact there had been prior litigation back in 2016 as well. National Amusements, Inc. (NAI), which owned a majority of the voting shares of both CBS and Viacom, sought coverage for the defense and settlement of the 2019 litigation from its D&O insurers. The insurers contended that the 2019 post-Merger litigation and the 2016 lawsuits were interrelated, and therefore that the settlement was covered under policies in force in 2016, rather than under the policies in force in 2019.

In an opinion dated February 17, 2025, but only recently made public, the Delaware Superior Court granted NAI’s motion for summary judgment, holding that the 2019 Suit is not interrelated with the 2016 Suits, and therefore that costs associated with the 2019 Suit were covered under the 2019 Policy and not under the 2016 Policy. The court’s analysis, in which it concluded that the two sets of litigation were not “meaningfully linked,” is detailed and interesting, and helps to explain what factors are relevant in the analysis of the meaningfully linkage issue. A copy of the court’s opinion can be found here.Continue Reading Del. Court Holds Merger Litigation Not “Meaningfully Linked” to Prior Suits

John McCarrick

Readers of this blog have no doubt followed both the recent ongoing controversy over whether companies should leave Delaware for supposedly friendlier jurisdictions as well as the legislation recently introduced in the state’s General Assembly to try to address some of the legal concerns behind the leaving Delaware initiative. In the following guest post, and in the context of these issues, John McCarrick, a partner at the Robinson & Cole law firm in New York, takes a look at recurring Delaware issues that in his view are of significant concern to D&O insurers. I would like to thank John for allowing me to publish his 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 John’s article.Continue Reading Guest Post: DExit Drama and D&O Insurance Issues

As I have frequently noted on this site, Delaware’s courts have a well-earned reputation for being policyholder friendly. Accordingly, policyholders aiming to sue their insurers frequently seek to file their coverage lawsuits in Delaware. However, a recent ruling in a coverage dispute, in which the Delaware Superior Court concluded it lacked personal jurisdiction over two of the defendant insurers, underscores the fact that there are limits on the circumstances on which insurers can hauled into Delaware’s courts. The Delaware Superior Court’s February 19, 2025, opinion in the case can be found here. A February 27, 2025 LinkedIn post by Paul Curley of the Kaufman, Borgheest & Ryan law firm about the court’s ruling can be found here.Continue Reading Limits of Delaware Courts’ Personal Jurisdiction Over Non-Resident Insurers

As readers of this blog well know, a recent debate has been brewing over whether Delaware corporations should de-camp and reincorporate in another state, with Nevada and Texas often the preferred candidates. This debate gained momentum when Elon Musk called for states to redomesticate outside Delaware after the state’s courts struck down his ginormous Tesla pay package. As discussed here, in response to the DExit debate, Delaware legislators have now proposed a massive revision to Delaware’s corporate laws, among other things as a way to try to stop the perceived retreat of companies from Delaware. It now appears that opponents of the legislation are mounting an organized campaign to oppose the proposed revisions. It looks like the game is on for the proposed changes, as the bill sponsors prepare to try to move the legislation forward.Continue Reading Critics Launch Campaign Opposing Delaware SB 21