Did the Delaware Supreme Court Break the 'Directors' Shield'?
July 30, 2007
<i>Credit Lyonnais Bank Nederland, N.V. v. Pathe Communications Corp.</i> stands for the proposition that directors and officers of a Delaware corporation that is either insolvent or in the 'zone' of insolvency owe fiduciary duties to creditors as well as stockholders. In essence, it provided a 'shield' to directors against shareholder suits alleging that directors breached their duties to shareholders by acting to protect creditors. Now, the Delaware Supreme Court may have "broken the shield."
Personal Conduct Exclusions in D&O Policies: The Limited Reach
July 30, 2007
Virtually every directors' and officers' ('D&O') insurance policy contains personal conduct exclusions. Insurers frequently rely on such exclusions to deny or limit coverage. For example, in many of the recent claims involving financial restatements or stock options, D&O insurers have asserted that the personal conduct exclusions, such as those relating to illegal profit, deliberate fraud, and deliberate criminal acts, diminish or preclude coverage. Although insurers frequently rely on these personal conduct exclusions, the personal conduct exclusions are, in practice, limited in scope and application. This article highlights some of the key limitations.
The Smoking e-Mail
July 30, 2007
Many articles talk about the new e-discovery rules, but few address how to use electronic information in examining witnesses. Electronic discovery has changed not just the rules of document production, but also how to use these materials when questioning and preparing witnesses. Here are some ideas on preparing for witness questioning.
RAM Ruling Portends a New e-Discovery Brawl
July 30, 2007
A federal magistrate's order that stops a Web site from routinely tossing relevant data could, if replicated, carry broad e-discovery implications. Magistrate Judge Jacqueline Chooljian's ruling in late spring required TorrentSpy, a widely used indexing Web site that provides users with forums for comment and operates on a peer-to-peer protocol, to turn over customer data only ephemerally kept in its computers' random access memory, or 'RAM.' The ruling could result in floods of similar requests in other civil cases.
California Law: The Effect of an Insured's Failure to Comply with Policy Conditions
July 30, 2007
In many instances, an insured does not comply with the terms of every condition stated in a policy. Sometimes this is because the insured is not aware of the particular requirements of the policy, sometimes it is because a carrier has not required (or has waived) compliance, and sometimes it is because it is simply not practical, or possible, to comply with all of the requirements of the conditions. In many of these circumstances, insurance carriers reserve a right to deny coverage, or deny coverage on the ground that an insured has failed to comply with one or more conditions in the policy. However, whether or not an insured has complied with all of the particulars of a condition in a policy does not determine whether the insured actually forfeits coverage under the policy.
<i>Peskoff</i>, Cost-Shifting and Accessible Data
July 30, 2007
Now that the Federal Rules of Civil Procedure have been modified to acknowledge explicitly electronic information's role in contemporary legal disputes, the uneasy process of adapting rules written in the era of typewriters and mimeographs to a world of e-mail and metadata has been replaced by a new task: determining how the recent amendments have ' and have not ' altered the legal landscape concerning electronic discovery.
The Emergence of Prejudice As a Necessary Element of an Insurer's Late Notice Defense: An Analysis of NY Law
July 30, 2007
For years, insurers have invoked the so-called 'late notice' defense under New York law, with relatively frequent success, to deny insurance coverage to insureds in circumstances in which the insured provides notice that is not timely under New York's traditional 'no prejudice' rule. Under this 'no prejudice' rule, an insurer generally need not show any prejudice suffered by the insurer as a result of an insured's untimely notice of an occurrence or claim giving rise to liability. Insurers have been able to cite certain New York case law stating that, with a few exceptions, an insurer may avoid coverage if the insured's notice was untimely on the theory that notice is a condition precedent to coverage under the policy. <i>See, e.g., Security Mut. Ins. Co. v. Acker-Fitzgerald Corp.</i>, 293 N.E.2d 76, 78 (N.Y. 1972); <i>American Home Assurance Co. v. International Ins. Co.</i>, 684 N.E.2d 14, 16 (N.Y. 1997). This insured-unfavorable rule of law, however, appears to be in the process of changing. Recent New York case law indicates a shift away from a 'no prejudice' rule, and an even more recent proposed state statute would permit an insurer to deny insurance coverage only in circumstances in which the insurer could 'demonstrate that it has suffered material prejudice as a result of the delayed notice.' For these reasons, New York clearly appears to be moving toward the large majority of other states, which require an insurer to demonstrate material prejudice as a predicate to avoiding coverage in the context of the late notice defense.
MAKE REJECTION WORK
July 20, 2007
Make rejection work for you. I've often heard inside counsel bemoan the fact that most lawyers do not follow up with them after losing a rfp competition. They have almost as much investment in the rfp and selection process as outside counsel and frequently indicate that they learned alot of helpful information from the competitors. Yet they may not hear from the "losers" for years. The key here is to address the fact that they…
