Delaware high court affirms insurers’ win in D&O case
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The Delaware Supreme Court on Thursday briefly affirmed a 2021 lower court ruling in insurers’ favor in directors and officers liability insurance litigation stemming from the 2016 merger of a consumer products company.
Hoboken, New Jersey-based Jarden LLC, whose portfolio includes 120 consumer-product brands including Coleman sporting goods and Crock-Pot appliances, filed suit against a group of insurers including ACE American Insurance Co. over its 2016 merger, according to the underlying July 2021 lawsuit by the Delaware Superior Court in Jarden LLC v. Ace America Insurance Co. et al.
Litigation filed by shareholders, who had alleged the sale process leading up to the merger was flawed and unfair to stockholders, led to an appraisal proceeding that resulted in a Delaware Court of Chancery order that Jarden pay a $177.4 million judgment plus interest.
The company’s insurance policies provided a tower of coverage for securities claims brought for wrongful acts that occurred before a runoff date, the ruling sad.
But as the Delaware Supreme Court has reemphasized in an earlier ruling, an appraisal proceeding “does not involve any inquiry into claims of wrongdoing,” it said.
The lower court also agreed with the insurers that “even if the Appraisal demands were a ‘claim’ under the Policies,” it did not occur before the run-off date, as required.
Thursday’s order by the Supreme Court simply said it was affirming the lower court ruling “on the basis of and for the reasons assigned by the Court” in its ruling.
In addition to ACE, other insurers named as defendants in the case were Allied World National Assurance Co., Berkley Insurance Co., Endurance American Insurance Co., Illinois National Insurance Co. and Navigators Insurance Co.
Attorneys in the case had no comment or did not respond to requests for comment.
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