A D&O policy’s bump-up clause bars coverage for a shareholder class settlement that effectively increased merger consideration, according to the Delaware Superior Court’s ruling in MSG Networks Inc. v. Federal Insurance Company, et al., C.A. No. N23C-01-103 PRW CCLD, 2026 Del. Super. LEXIS 282 (Del. Super. Ct. June 11, 2026).
The coverage dispute arose
A federal court in New York recently addressed what constitutes a “final adjudication” triggering conduct exclusions. In Cumis Specialty Insurance Co. v. Kaufman, No. 21cv11107 (DLC), 2022 U.S. Dist. LEXIS 176535 (S.D.N.Y. Sept. 28, 2022), the court held that the subject conduct exclusions barred defense coverage for the insured’s appeal of his criminal conviction, rejecting the insured’s argument that a “final adjudication” of excluded conduct required his appeal to be decided.
Continue Reading New York Federal Court Holds That Imposition of Criminal Sentence Is “Final Adjudication” Triggering Conduct Exclusions
Delaware state and federal courts have issued several important rulings on allocation under D&O insurance policies. Most recently, in SSC Technologies Holdings, Inc. v. Endurance Assurance Corp., No. N20C-01-088 EMD CCLD, 2022 Del. Super. LEXIS 164 (Del. Super., April 26, 2022) (Davis, J.), the court declined to apply the “larger settlement rule” for allocation when there are covered and uncovered matters.
Continue Reading Recent Rulings in Delaware Courts on Allocation Under D&O Policies