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The United States Court of Appeals for the Eighth Circuit, applying Minnesota law, affirmed a trial court’s decision that the prior acts exclusion in a directors and officers liability policy barred coverage for shareholder suits arising out of on an insured’s failure to disclose related-party transactions to the SEC before going public. Tile Shop Holdings, Inc. v. Allied World Nat’l Assurance Co., 2020 WL 7133358 (8th Cir. Dec. 7, 2020). The court concluded that the shareholder suits alleged Wrongful Acts that took place prior to the retroactive date or alleged acts that were the same or related to Wrongful Acts that occurred before that date.

Continue Reading Prior Acts Exclusion Bars Coverage for Shareholder Suits Based on Failure to Disclose Related-Party Transactions to SEC

A California court ruled that a forum selection provision in a Delaware company’s registration statement requiring that certain securities litigation be brought solely in federal court was enforceable.  Wong v. Restoration Robotics, Inc., Case No. 18CIV02609 (Cal. Sup. Ct., San Mateo County, Sept. 1, 2020).  The California court’s ruling could signal the beginning of a broader trend, started in Delaware, that would be helpful to securities defendants, and, in turn, to insurance carriers.

Continue Reading California Court Enforces Federal Forum Selection Provision For 1933 Act Claims