Corporate policyholders should carefully consider insurance coverage implications when structuring mergers, acquisitions, or other transactions that may impact available insurance assets. A New Jersey federal court recently granted summary judgment for a surviving bank asserting coverage rights under a D&O policy issued to an entity that dissolved in a statutory merger, based in part on the wording of the parties’ merger agreement structuring the transaction in accordance with the New Jersey Business Corporation Act (“NJBCA”).
On November 2, 2016, a federal judge in California ruled that a Real Estate Property Managed endorsement in policies issued to a real estate manager negated a standard policy exclusion, but also rendered the policies excess to other available insurance. The case involved a dispute over coverage for a bodily injury claim involving “Pigeon Breeders Disease,” allegedly contracted due to the insured’s failure to keep pigeons away from a condo complex’s rooftop HVAC units. The plaintiff sued the property owners, Jerry and Betty Lee, and the property manager, Sierra Pacific Management Co. Inc. (Sierra Pacific).