Restitution Can Leave D&O Policyholders High And Dry

Law360, New York (March 26, 2010, 11:03 AM EDT) -- Companies facing securities claims precipitated by the recession could run into trouble with their insurers if the damages at issue dangle close to the definition of restitution or disgorgement, policyholder attorneys warn, pointing to an ongoing coverage suit involving biotechnology Genzyme Corp. as a sign of future battles to come.

In the closely watched case, under appeal in the U.S. Court of Appeals for the First Circuit, a Massachusetts federal judge found that a $64 million settlement with certain shareholders was meant to “redress” an imbalance...
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