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How Preclusion of an FDIC Action Under the Insured v. Insured Exclusion Could Change D&O Coverage
The 2008 financial crisis might be behind us, but coverage disputes stemming from the flood of lawsuits brought by the Federal Deposit Insurance Corporation (“FDIC”) against directors and officers of failed banks are far from over. With the FDIC filing lawsuits against more than 1,200 individuals for directors and officers liability between January 2009 and August 2015, coverage continues to be hotly contested across the country, with the most heavily litigated issue being whether a lawsuit commenced by the FDIC as a receiver of a failed bank is precluded by the “insured v. insured” exclusion commonly contained in Directors and Officers liability (“D&O”) policies. See FDIC, http://1.usa.gov/1NdXuA1.
The application of this exclusion, which precludes coverage for claims based on suits brought by one insured against another, has yielded mixed results. Although some courts have held that insured v. insured exclusions preclude coverage because the FDIC “steps into the shoes” of the company when it brings lawsuits against directors and officers in its capacity as a receiver; other courts, representing a growing consensus favoring coverage, have held that the application of the exclusion in the FDIC context is ambiguous and must be construed against the insurer. However, a recent decision by the U.S. Court of Appeals for the Tenth Circuit departs from the coverage trend and raises issues that are likely to change the D&O landscape going forward.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
Coverage Issues Stemming from Dry Cleaner Contamination Suits
In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.