D&O Liability

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Reversing a district court holding to the contrary, the First Circuit has declared that Massachusetts public policy does not prohibit D&O carriers from insuring against damages allegedly incurred by one class of shareholders as a result of an unfair benefit conferred on another class of shareholders.  Rather, the Court held that the terms of the policy had to be given their plain and ordinary meaning.  The  Court then remanded the case for an allocation proceeding. …
Read More First Circuit Remands D&O Coverage Dispute for Allocation

A Maryland bankruptcy court has declared that Side A benefits under a D&O policy are not property of the bankrupt estate, with the result that two former executives who have been accused of making illegal payments and diverting funds from their former employer to start a new venture may be able to recoup certain defense costs. …
Read More Court Rules D&O Policy’s Side-A Benefits Not Property of Bankrupt Estate

The law firm of Akin Gump Strauss Hauer & Feld, LLP is seeking to quash a subpoena from accused Ponzi schemer Allen Stanford in the U.S. District Court for the Southern District of Texas, where Mr. Stanford’s criminal case is pending.  Mr. Stanford allegedly conducted an $8 billion Ponzi scheme involving certificates of deposit. …
Read More Insurers’ Law Firm Engaged In Multi-Pronged Legal Battle Against Accused Ponzi Artist

Media reports suggest that BP’s D&O insurers could face significant exposure to claims stemming from the Deepwater Horizon disaster.  As we previously reported, BP self-insures much of its property and liability cover through its captive insurer, Jupiter Insurance Ltd.  According to media reports, Jupiter does not purchase reinsurance; but it does currently have over $700 million on hand to respond to Deepwater Horizon claims. …
Read More D&O Insurers Face Potential Exposure on Deepwater Horizon Claims

A federal judge has ruled that directors and officers of a company in bankruptcy proceedings may continue to access an eroding liability policy to cover their defense costs.  The court based its decision on a close examination of the policy language, and alternatively held that the individual directors and officers had shown they were entitled to relief from the automatic stay. …
Read More Delaware Bankruptcy Court Rules That Directors & Officers May Access Eroding Policy Despite Company’s Bankruptcy

The U.S. District Court for the District of Minnesota recently dismissed a directors and officers liability coverage suit, rejecting plaintiffs’ argument that an underlying suit had to be brought by the insured in his capacity as an insured in order to implicate the policy’s insured vs. insured exclusion. …
Read More Minnesota Federal Court Rejects “Capacity” Limitation As To Insured Vs. Insured Exclusion

The US District Court for the District of Connecticut recently dismissed a customer suit against an insurer, based upon its determination that all of the underlying claims were excluded by the policy’s Insolvency Exclusion. …
Read More Court Holds Coverage for Madoff Suits Excluded Under Policy’s Insolvency Exclusion

A federal judge in the United States District Court for the Southern District of Florida recently issued findings of fact and conclusions of law following a bench trial in favor of Wachovia in a suit brought by investors who were unable to liquidate certain Auction Rate Securities (“ARS”) originally purchased through Wachovia. …
Read More SDFL Judge Finds for Wachovia in Unique Auction Rate Securities Suit

The Second Circuit recently overturned the Southern District of New York’s dismissal of a claim under § 10(b) Securities Exchange Act of 1934 relating to management fees charged to a mutual fund in Operating Local 649 Annuity Trust Fund v. Smith Barney Fund Management LLC, 595 F.3d 86 (2d Cir. 2010). 

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Read More Second Circuit Allows Securities Fraud Claim Alleging Misrepresentations Regarding Nature, But Not Amount, Of Mutual Fund’s Fees