A Delaware state court said more information is needed before it can issue a ruling in director and officer liability lawsuits filed by American International Group Inc., Chubb Ltd. units. and WR Berkley Corp. and a device from Samsung Electronics America Inc. against each other. a transaction in 2017.
The Delaware Superior Court in Wilmington denied motions filed by both sides in the lawsuit, Harman International Industries Inc. v. Illinois National Insurance Co., Federal Insurance Co. and Berkley Insurance Co.
Illinois Insurance is an AIG unit and Federal Insurance is a Chubb unit.
AIG issued primary D&O coverage to Harman, which made connected car technology, including lighting, sound design and analytics, for January 2016 through January 2017, with Chubb providing first excess and Berkley second excess, together providing $40 million in coverage.
The coverage provided a “bump-up provision,” which excludes coverage for settlements of M&A disputes that “boost” the amount paid to shareholders of the target entity in the original M&A deal.
Harman and Ridgefield Park, New Jersey-based Samsung Electronics America Inc. announced a merger agreement in November 2016. In July 2017, Patricia B. Baum filed an amended class action in US District Court in Hartford against Harman and other parties alleging violations of federal securities laws, and asks for “compensatory and/or respirable” damages.
The insurers denied coverage for the lawsuit, which was settled in June 2022 for $28 million, according to the ruling. The parties sued and countersued each other in the ensuing trial.
The court denied the insurers’ motion to dismiss and Harman’s motion for summary judgment. “At this stage of the proceedings before any discovery has taken place, the court cannot say with certainty whether the elements of this (or either party’s) formulation have been met,” it said.
Attorneys in the case did not respond to requests for comment.