D&O Policies

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The Second Circuit recently affirmed a decision by a New York district court that the contract exclusion in a D&O insurance policy applied to all of the causes of action in an underlying action, including a cause of action for declaratory relief stemming from a shareholder agreement. See Paraco Gas Corp. v. Ironshore Indem., Inc., No. 23-1069-cv, 2024 U.S. App. LEXIS 14628, at *9 (2d Cir. June 17, 2024).Continue Reading Second Circuit Affirms Broad Reading of Contract Exclusion in Closely Held Family Corporation Litigation

The Fourth Circuit has held in a published decision that a 2015 reverse triangular merger between Willis Group Holdings plc (“Willis”) and Towers Watson & Co (“Towers Watson”) was “the acquisition of all or substantially all the ownership interest in or assets” of Towers Watson within the terms of the Bump Up Provision in the Towers Watson D&O policies.  See Towers Watson & Co. v. National Union Fire Insurance Co. of Pittsburgh, Pa., 67 F.4th 648 (4th Cir. 2023).Continue Reading Fourth Circuit Holds That Reverse Triangular Merger Was Acquisition of Insured Entity for Purpose of Subject D&O Policy’s Bump Up Provision

A federal court in California recently held that a D&O policy issued to Ceradyne, Inc. affords no coverage for an $11.3 million settlement of breach of fiduciary duty claims alleging that Ceradyne’s directors undervalued the company and agreed to sell it to 3M for an inadequate price. See Ceradyne, Inc. v. RLI Ins. Co., No. 2:21-cv-6373 JVS (KES), 2022 U.S. Dist. LEXIS 198217 (C.D. Cal. Oct. 31, 2022).
Continue Reading California Federal Court Holds That Settlement of Post-Merger Breach of Fiduciary Duty Claim Brought Against Acquired Company’s Directors Is Not Covered by Its D&O Policy