Of the different contexts within which securities class action lawsuits arise, one of the most significant is the bankruptcy context. As detailed in the following guest post from Michael Klausner and Jason Hegland of Stanford Law School, securities class action lawsuit arising in bankruptcy are different from cases involving solvent companies. Their guest post provides
D&O Insurance: Health Care Organizations Face Increasing Rates, Tightening Terms
Largely as a result of changes in the industry following the enactment of the Affordable Care Act, health care organizations have seen their D&O insurance rates increasing and the available terms and conditions tightening, according to a December 10, 2013 report from Marsh. Moreover, these changes are likely to continue in 2014, according to the
D&O Insurance: Professional Services Exclusion Precludes Coverage for Claims Arising From Broker-Dealer’s Offering Underwriter Activities
On November 21, 2013, in a terse, two-page summary order (here), the Second Circuit affirmed a district court ruling applying New York law and holding that a D&O insurance policy’s professional services exclusion precludes coverage for claims brought against broker-dealer David Lerner Associates, based on the firm’s offering underwriter and financial products sales
More About D&O Insurance and Bankruptcy
Although D&O insurance represents an important risk management tool for every company, the protection that a D&O insurance policy affords directors and officers is particularly important in the bankruptcy context, when the company is no longer able to indemnify the individuals. Yet, as industry practitioners know, a number of issues recur in the bankruptcy context
D&O Insurance: Known Circumstance Exclusions
D&O insurance policies often address a policyholder’s particular circumstances. One way that D&O insurers sometimes address the fact that a company has experienced adverse circumstances is to incorporate into its policy a “known circumstances exclusion” precluding coverage for those circumstances. In an October 23, 2013 opinion (here), the First Circuit affirmed the opinion
More About the D&O Insurance Implications of the SEC’s New Admissions Wrongdoing Requirements
Numerous questions surround the SEC’s new policy requiring enforcement action defendants in “egregious” cases to admit to wrongdoing in order to settle with the agency, rather than simply agreeing to neither admit nor deny the agency’s allegations. As I discussed in a prior post (here), among the questions is the issue of what
FDIC Statement Inveighs Against D&O Insurance Exclusions and Coverage for Civil Money Penalties
In an unusual step, the FDIC, the federal regulator responsible for insuring and supervising depositary institutions, has weighed in on financial institutions’ purchase of D&O insurance. The FDIC’s October 10, 2013 Financial Institutions Letter, which includes an “Advisory Statement on Director and Officer Liability Insurance Policies, Exclusions and Indemnification for Civil Money Penalties” (here
D&O Insurance: How Many Different Ways Can Coverage Be Precluded for a Single Case?
Due to the complexity both of the D&O insurance policy and of the kinds of claims that can arise, the question of whether and to what extent a particular claim may be covered is often disputed. Sometimes though a particular claim is simply not covered. That was the case in a recent coverage dispute in
InSights: What to Watch in the World of D&O
Every fall, I put together a list of the current hot topics in the world of Directors and Officers (D&O) Liability Insurance. In the latest issue of InSights (here), I review the critical issues to watch now in the world of D&O. This year’s list includes several key regulatory and litigation developments as well
D&O Insurance: Insured vs. Insured Exclusion Unambiguously Precludes Coverage for FDIC Failed Bank Lawsuit
One of the recurring D&O insurance coverage issues that has arisen during the current wave of failed bank litigation has been the question whether coverage for an action by the FDIC in its role as receiver of a failed bank against a failed bank’s directors and officers is precluded by the Insured vs. Insured exclusion