As I noted at the time (here), on December 19, 2018, Delaware Vice Chancellor Later held that under Delaware law, a corporate charter provision specifying that liability actions under Section 11 of the Securities Act of 1934 must be brought in federal court are invalid and ineffective. A copy of Laster’s opinion in Sciabacucchi v. Salzburg (referred to below as the Blue Apron decision) can be found here. In the following guest post, Paul Ferrillo, Robert Horowitz, and Steven Margolin of the Greenberg Traurig law firm take a look at the Blue Apron decision and examine whether or not Congress will act to eliminate concurrent state court jurisdiction for state court claims. The authors also examine the steps companies should take now in light of the possibility of facing litigation in both state and federal court. I would like to thank the authors for their willingness to allow me to publish their article as a guest post. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit an article. Here is the authors’ article.
Continue Reading Guest Post: Section 11 Claims May Remain in State Court; How Will Companies and D&O Carriers Respond?

The Gateway of India

The D&O Diary’s Asia Pacific itinerary continued this week with a stop in India’s largest city and financial capital, Mumbai. My primary reason for traveling to Mumbai was to participate in a professional liability insurance program co-sponsored by PLUS and the local Indian professional liability insurance organization, Bima Gyaan. Despite the travel distances involved and the time required, my visit to India was relatively brief. My opportunities to explore Mumbai were limited. I had just enough touring time to be reminded what an amazing place Mumbai is.
Continue Reading A Visit to Mumbai

gavelOver the last several days, Doug Greene of the Lane Powell law firm has been running a series of articles on his D&O Discourse blog asking the question “Who is Winning the Class Action War?” In the aggregate, the multi-part series provides an interesting commentary on the current state of securities class action litigation in the United States. The articles in the series are thought-provoking and provocative — apparently deliberately so — and I commend them to readers for the perspective they provide on the current state of play in securities litigation, from the outlook of an experienced defense-side securities class action litigator.

Based on my own varied experiences, I have my own perspective on some of the topics Greene discusses in his articles, which I have set out below. I want to emphasize at the outset that I am neither entirely disagreeing with nor entirely agreeing with Greene’s analysis and conclusions. I offer my thoughts here for whatever they may be worth, as part of the dialogue that Greene’s articles undoubtedly will provoke.
Continue Reading Commentary on “Winning the Securities Class Action War”

deskbookThose of us involved in the world of D&O liability insurance are well aware that the coverage issues often are technical and the relevant legal principles can change quickly as a result of evolving case law. It would be valuable for  practitioners in this area to have access to a reliable resource where the key principles are described and where the key case law authority can quickly be located. Fortunately, there is such a resource. It is the “Directors & Officers Liability Deskbook” (about which refer here), an American Bar Association publication written and edited by attorneys from the Sedgwick law firm. The book’s recently published Fourth Edition is a timely update. Every D&O liability insurance practitioner and indeed anyone looking for a quick and ready resource on D&O liability insurance coverage issuers will welcome this updated edition.
Continue Reading Book Review: Directors & Officers Liability Insurance Deskbook

third editionIn an increasingly global economy, questions arising from cross-border activities are an increasingly common part of day-to-day business activities. Among other things, these circumstances mean that companies frequently must contend with the legal requirements in multiple jurisdictions and deal with the associated legal exposures as well. The potential liability issues in turn raise sometimes difficult questions about indemnification and insurance. For those of us in the insurance industry, these cross-border liability, indemnification, and insurance issues can be challenging.
Continue Reading Book Review: An Updated Global Guide to Directors’ Liability and Indemnification

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Rehana Box
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Marie Vlassis

As I have noted in several posts on this site (most recently here), one of the recurring D&O insurance coverage questions is the extent of the preclusive effect of the professional services exclusion. In the following guest post, Rehana Box and Marie Vlassis of the Ashurst law firm take a look at judicial developments in Australia regarding this issue. This article previously appeared in the LexisNexis Australian Insurance Law Bulletin. I would like to thank Rehanna and Marie for their willingness to publish their article on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to publish a guest post on this site. Here is Rehana and Marie’s guest post.
Continue Reading Guest Post: Professional Services: What Does this Term Mean in an Exclusion Clause?

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Peter Webster

As I have frequently noted on this blog, most recently here, the question of whether or not the Insured vs. Insured applies to preclude coverage is a frequently recurring D&O insurance coverage issue. In the following guest post, Peter Webster of the Carlton Fields law firm takes a look at a recent Florida intermediate appellate court decision interpreting and applying a D&O insurance policy’s Insured vs. Insured exclusion. Peter and his Carlton Fields colleague Patricia Thompson represented the insurer in the proceeding. I would like to thank Peter for his willingness 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 Peter’s guest post.
Continue Reading Guest Post: Court Holds Insured vs. Insured Exclusion Unambiguous, Precluding Coverage

dandowhattoknowAfter attending the PLUS D&O Symposium  some years ago, several colleagues at Partner Re thought it might be worthwhile to provide D&O insurance professionals with historical overview of the evolution of Directors and Officers insurance (D&O) in the US marketplace.   As a result, Brian Sabia, SVP Senior Underwriter Specialty lines; Catherine Rudow, SVP Senior Underwriter Specialty Lines; and Nicholas DeMartini, AVP Senior Underwriter Specialty Lines, all of Partner Reinsurance Company, drafted the following article, which starts with the Securities Act of 1933 and progresses through the relevant Acts, key court rulings, and the ups and downs that have driven the D&O insurance market and the evolving features of the D&O insurance policy. Their complete paper can be found here.

I would like to thank Brian, Catherine and Nicholas for their willingness to publish their article on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ guest post.

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This paper provides an historical overview of the evolution of Directors and Officers insurance (D&O) in the U.S. market since 1933, taking you through the relevant acts, key court rulings, ups and downs of the market, as well as the evolving coverage features of D&O insurance. This paper is intended for the insurance professional as an additional introduction to this increasingly relevant and ever evolving management liability product. 
Continue Reading Guest Post: D&O What to Know: A Guide to the Evolution of Directors and Officers Insurance from 1933 to the Present

questionsBank directors often have many questions about their D&O insurance coverage, and rightly so. If significant reversals at the bank result in liability claims against the company’s senior officials, the bank’s D&O insurance could be the directors’ last line of defense. In this post, I address two issues that bank directors often ask about: first, does the bank’s D&O insurance cover civil money penalties? And, second, as the credit crisis retreats further into the past, when is the D&O insurance marketplace for banks going to “return to normal”?
Continue Reading Answering Bank Directors’ D&O Insurance Questions

dcctofappealsThe problems that can arise from the wording of the professional services exclusion in a service company’s D&O insurance policy are perennial issues and a recurring topic on this blog (see for example here). When the exclusion in a service company’s management liability policy is interpreted broadly the exclusion can sweep so extensively that it can preclude coverage for the very types of claims the management liability policy was intended to insure. A recent decision from the District of Columbia’s highest court highlights these concerns.

In a February 11, 2016 District of Columbia Court of Appeals decision (here), the appellate court, applying District of Columbia law, reversed a lower court ruling that the professional services exclusion in the management  liability insurance policy of defunct Carlyle Management LLC precluded coverage for the various claims that had been asserted against Carlyle, related entities, and its senior officials. The Court of Appeals did not affirmatively conclude that the underlying claims were covered; rather, it held only that the broadly worded professional liability exclusion was ambiguous, and that the question of coverage is properly a question for a factfinder. While the appellate court did not affirmatively find coverage, the court’s opinion underscores the concerns with interpreting and applying the professional liability exclusion in a service firm’s management liability insurance policy too broadly.
Continue Reading D.C. Appellate Court Reverses Ruling that Professional Services Exclusion Bars Coverage for Failed Investment Firm’s Claims