In an environment where public company directors and officers face increasing scrutiny and expanding liability exposures, the indemnification and insurance protections available to them are increasingly important. A July 15, 2013 memorandum from the Gibson Dunn law firm entitled “Director and Officer Indemnification and Insurance – Issues for Public Companies to Consider” (here)
Guest Post: J.P. Morgan Decision Curtails the Phantom “Restitution Defense” to D&O Coverage
As I discussed in a recent post (here), in a June 11, 2013 opinion, the New York Court of Appeals held that J.P Morgan (which had acquired Bear Stearns) is not barred from seeking insurance coverage for a $160 million portion of an SEC enforcement action settlement labeled as “disgorgement,” where Bear Stearns&rsquo
Second Circuit: Excess D&O Insurance Not Triggered When Underlying Carriers Are Insolvent, Even If Loss Exceeds Excess Attachment Point
On June 4, 2013, the Second Circuit, in an insurance coverage action involving the defunct Commodore International computer company, affirmed that excess D&O insurance is not triggered even if losses exceed the amount of the underlying insurance, where the underlying amounts have not been paid due to the insolvency of underlying insurers. The Second Circuit’s
Guest Post: Securing the Director and Officers Liability Insurance Lifelines! What Every Director Needs to Know – Before Entering Troubled Waters
At times of trouble, D&O insurance can represent the last line of defense for corporate directors. For that reason, corporate board members rightfully are concerned about their insurance and want reassurance that their company’s policy will provide them the protection they will need. Unfortunately, directors don’t always know the questions to ask and only find
InSights: The Significance and Implications of the $139 Million News Corp. Derivative Suit Settlement
One of the more interesting recent developments in the world of corporate and securities litigation was the $139 million settlement of the News Corp. shareholders derivative suit. Not only is this settlement apparently the largest ever cash settlement of a shareholders derivative suit, but the entire amount of the settlement is to be funded by
D&O Insurance: Providing Coverage for Plaintiffs’ Fee Awards?
A recurring D&O insurance coverage issue is the question of whether or not the D&O insurance policy provides coverage for a plaintiffs’ fee award. The question often arises in the context of a settlement of a shareholders’ derivative suit that includes an agreement to pay the plaintiffs’ attorneys fees as part of the settlement. In
D&O Insurance: Separate Claims Deemed a Single Claim–What Are the Implications?
As I have previously noted (refer for example here), one of the most vexing issues in the D&O claims arena is the questions of whether or not two claims are or are not interrelated. If the two are interrelated, they are deemed a single claim for purposes of determining the claims made date. The
D&O Insurance: Untimely Notice Precludes Coverage
In a May 16, 2013 decision (here), Eastern District of Missouri Magistrate Judge Terry Adelman, applying Missouri law, determined that the failure of an insured under a management liability insurance policy to provide timely notice of claim precluded coverage under the policy, even in the absence of a showing of prejudice to
D&O Insurance to Fund Entire “Largest Ever” $139 Million News Corp. Derivative Suit Settlement
In what the plaintiffs’ lawyers claim to be the largest derivative lawsuit settlement ever, the parties to the News Corp. shareholder derivative litigation have agreed to settle the consolidated cases for $139 million. The company also agreed to tighten oversight of the company’s operations and to establish a whistleblower hotline, as well as other corporate
D&O Insurance: Fourth Circuit Affirms That Convicted Exec Must Repay Insurer for Defense Expenses
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