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02 Jan 2018 Sold! Close Your M&A Deal Confidently by Funding Post-Closing Liabilities Through Insurance

  When a company merges with another entity and becomes a single entity, or where a company is acquired by another organization, it is critical that both parties understand their insurance programs to ensure that transactional risks are properly covered. Companies sometimes do not give adequate consideration to the possibility of future claims following a merger or sale, and do not place into the deal a funding mechanism for post-closing claims.   This article offers some ideas to consider when planning an insurance solution to such claims as part of due diligence.   Tail policies cover actions taken before the closing   If you sit on the board of a company, the completion of an M&A deal does not insulate you from being sued for…

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08 Oct 2015 Regulation S-P Violation: Are You Prepared For A Cyber-Security Breach?

On Sept. 22, 2015, the Securities and Exchange Commission (SEC) announced the first violation by a registered investment advisor of the so-called Safeguards Rule (Regulation S-P) pertaining to the protection of personally identifiable information from cyber-attack. This is the first instance of the SEC enforcing Regulation S-P against an investment advisor.   The Regulation, broadly speaking, requires broker-dealers, investment advisers and other financial firms to protect confidential customer information from unauthorized release to unaffiliated third parties. Included in Regulation S-P is the “Safeguard Rule” (Rule 30(a)), which requires financial institutions to, among other things, adopt written policies and procedures reasonably designed to protect customer information against cyber-attacks.  This raises the question:  Are you prepared for a cyber-attack (and the attendant liability)?   In its findings,…

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24 Jul 2015 Quality Egg Appeal Serves as a Reminder to Look for Cracks in D&O Coverage for Responsible Corporate Officers

Earlier this week, Peter and Austin DeCoster submitted their opening briefs in their appeal of the three-month prison sentence they each received for pleading guilty to misdemeanor violations of the federal Food Drug and Cosmetic Act (FDCA). You may recall that the DeCosters owned Quality Egg, LLC, the Iowa-based egg production company that had a salmonella outbreak in 2010 that resulted in a recall of millions of eggs and, according to the court’s order on the DeCosters’ sentencing motions, sickened thousands of consumers. In connection with that outbreak, the DeCosters pled guilty to a charge of introducing adulterated food into interstate commerce in violation of the FDCA.   Although there was a dispute as to whether and how much the DeCosters actually knew about the…

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