The Connecticut General Assembly recently enacted legislation (Public Act 07-113), signed into law by Governor M. Jodi Rell on June 12, to prohibit health insurers or HMOs (termed “health care centers” under Connecticut law) from engaging in the practice of “post-claim underwriting.” 

…
Read More Connecticut Outlaws Post-Claim Underwriting by Health Insurers

New York’s highest court recently considered whether a plaintiff and defendant who enter into a high-low agreement in a multi-defendant action (frequently referred to as a “Mary Carter Agreement”) must disclose the terms of that agreement to the court and the remaining parties.  While these agreements are used routinely, with and without disclosure to all parties, this appears to have been an issue of first impression in NY. 

…
Read More Non-Agreeing Defendants Must be Told of High-Low Mary Carter Agreements with Plaintiff or Risk Reversal

The criminal prosecution of ex-Brocade CEO Greg Reyes over Brocade’s improper accounting for backdated stock options continues today. …
Read More The Brocade Trial: Judge Breyer Postpones Decision on Motion to Dismiss and Orders The Defense To Proceed

On June 21, 2007, in a much anticipated ruling affecting the ability of federal securities fraud complaints to withstand a motion to dismiss, the United States Supreme Court resolved a dispute between the federal circuit courts regarding what securities fraud plaintiffs must plead concerning the state of mind of the defendants in order for a complaint to withstand dismissal. 

…
Read More Supreme Court Requires Plaintiff to Meet Stringent Pleading Standard: Under PSLRA’s “Strong Inference” Requirement, Courts Must Consider Plausible Inferences Favoring Defendants

In North American Catholic Educational Programming Foundation, Inc. v. Gheewalla, 2007 WL 1453705 (Del. May 18, 2007), the Delaware Supreme Court, in a case of first impression, provided some clarity on the controversial issue of whether and to what extent creditors have the ability to assert fiduciary duty claims against directors. 

…
Read More Delaware Supreme Court Rules That Creditors Of A Delaware Corporation Cannot Bring Direct Claims Against Directors For Breach of Fiduciary Duty – But Questions Remain

The first criminal trial of stock options backdating conduct may end with the court finding that government prosecutors failed to present sufficient evidence of intent to support a conviction.  

…
Read More The Brocade Trial: Judge Breyer May Take Case Away From Jury

Recently, the United District for the Northern District of California rejected a cedent’s contention that the follow-the-settlements clause is implied in reinsurance contracts.  See American Motorists Ins. Co. v American Re-Insurance Co., No. C5-5202 (N.D. Cal. May 29, 2007). 

…
Read More Federal Court Rejects Cedent’s Argument that Follow-the-Settlements Clause is Implied in Facultative Certificates

The United States government appears to have conceded that a complete dismissal of indictments against 12 former KPMG partners is the only appropriate remedy in light of an earlier ruling that federal prosecutors violated the defendants’ constitutional rights.  The action, U.S. v. Stein, No. 05 Crim. 0888 (S.D.N.Y.), stems from allegations that KPMG employees participated in a scheme to defraud the IRS by creating fraudulent tax shelters for wealthy clients. 

…
Read More Federal Prosecutors Hint at Appeal of KPMG Defense Costs Decision

In R&Q Reins. Co. v. Rapid Settlements, Ltd., and Gwendolyn Sands Brown, No. 06-14329 (S.D. Fla. May 14, 2007), R&Q Reinsurance Company (“R&Q”) was obligated to make periodic payments to an underlying insured, Gwendolyn Brown (“Brown”), under the terms of a structured settlement agreement entered into to resolve a personal injury claim. 

…
Read More FAA’s Time Limitations Do Not Apply to Non-Party to Arbitration Agreement