On December 30, 2009, the United States District Court for the Southern District of New York in MBIA, Inc. v. Federal Ins. Co. et al., Civ. No. 08cv4313 (S.D.N.Y. Dec. 30, 2009), held that, in certain instances, legal costs incurred by a special litigation committee in connection with a shareholder derivative litigation may be covered under a D&O policy.
There are several significant implications of the MBIA decision, which are discussed in detail below.