In an interesting decision analzing how a D&O run-off policy’s Subsequent Acts Exclusion operates, a New York federal district court has ruled that acts after the cut-off date that aren’t unlawful don’t preclude coverage for an underlying claim based on alleged misrepresentations made before the cut-off date. Judge Jed Rakoff’s March 13, 2026, decision in the case, applying New York law, can be found here. A March 18, 2026 post about the decision on the Pillsbury law firm’s Policyholder Pulse blog can be found here.Continue Reading Later Acts that are Not “Wrongful” Don’t Bar D&O Run-Off Coverage
A recent judicial ruling out of the U.K. provides an interesting perspective on directors’ duties under applicable law when a bankrupt company is in liquidation. As discussed below, the Court held that a director’s duties continue in relevant respects even if the director’s powers cease as of the date of the bankruptcy filing. The circumstances of the case provide an interesting example of a claim that arose against a former director post-liquidation. As discussed below, the circumstances also provide an illustration of why the purchase of post-liquidation run-off coverage is advisable. Though the circumstances arose under U.K. law, the situation bears enough similarities to what might arise under equivalent U.S. law that the liability and insurance lessons are instructive even in the U.S. context.