- Bump-up claims: In the context of an acquisition, these are claims by shareholders of the company-to-be-acquired alleging that the company has been undervalued. These actions seek to have the purchase price raised or “bumped-up.”
- Clawback: Generally, money or benefits that were distributed and later taken back under special circumstances. Both Sarbanes-Oxley and the Dodd-Frank Act create circumstances where compensation may be “clawed back” from executives following financial statements at their companies.
- Entity versus insured exclusion: A recent (favorable) variation on the Insured vs. Insured exclusion found in a D&O policy. It precludes coverage for claims brought by the company or insured organization against other insureds. So the company itself can’t sue its Directors or Officers and gain coverage for their defense or settlement under the D&O policy.
- Double derivative claim: A rare derivation on derivative suits, this is a lawsuit brought by a shareholder of a parent corporation on behalf of a wholly owned subsidiary for alleged wrongs to a subsidiary. They generally occur where shareholders have lost standing to maintain a standard derivative action due to the acquisition of the corporation in a stock-for-stock merger; the shareholder, in his new capacity as a shareholder of the acquirer, then reasserts the claim double derivatively.
- Updated information as it relates to Sections 11, 12, & 15 of the 1934 Act dealing with securities offerings, including IPOs.
Willis Publishes D&O Dictionary To Help Firms Navigate The Executive Risk Liability Landscape
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