Delaware The Supreme Court on Wednesday upheld a lower court ruling that a unit in Alleghany Corp. is required to fund the settlement of two directors and officers for liability insurance involving Dole Food Co. Inc.
Alleghany Unit RSUI Indemnity Co. had applied for a declaration that it was not obligated to fund the settlement of a breach of trust filed in the Delaware Chancery Court and a federal securities action filed in the U.S. District Court in Delaware under its excessive coverage, under the unanimous decision of the Supreme Court of Delaware. RSUI Indemnity Co. v David H. Murdock and Dole Food Co., Inc.
Westlake Village, California-based Dole has $ 15 million D&O insurance issued by Axis Insurance Co. RSUI has the eighth tier of coverage, providing $ 1
In November 2013, Murdock, Dole's CEO and CEO, took the company private through a merger transaction approved by shareholders. But some Dole shareholders sued the Chancery Court and challenged the transaction.
The court found that Murdock and Dole's Advocates General were jointly and severally liable for $ 148.2 million. A securities group application was separately filed in federal court, which Dole ruled.
Meanwhile, disputes between state courts by the RSUI, including insurers, led to court decisions against insurers. Issues raised in an appeal by the RSUI included whether California law, rather than Delaware law, was applied.
The Supreme Court ruling stated: “The insured's legal ties to Delaware are more important – and should therefore be given greater weight than their physical location in California.
"Nor do we find that the other previously discussed contacts in California are legally significant or equally burdened with political considerations such as Dole's status as a Delaware company and the individual insurances' status as board members and executives, all operating under Delaware law. "It appears from the decision.
Dole Lawyer Kurt A. Pasich, of the Pasich LLP in Los Angeles, said in a statement:" We believe it is an important decision that insurance issues. An RSUI lawyer did not respond to a request for comment.
In September, a Delaware court denied a request to dismiss D&O disputes filed by insurers, including RSUI, against an energy company sued in connection with a merger.