In re: TIAA-CREF Insurance Appeals, Nos. 478, 2017; 479, 2017; 480, 2017; 481, 2017 (Del. July 30, 2018)

The Supreme Court of Delaware affirmed the Superior Court’s finding that under the relevant D&O policies at issue, the settlement amounts TIAA-CREF paid to class action plaintiffs did not represent uninsurable disgorgement.  In doing so, the Supreme Court distinguished certain cases from New York relied upon by the insurance companies that held settlements represented uninsurable disgorgement.  Unlike the cases cited by the defendants, the settlement amounts at issue in the underlying cases here did not represent the return of ill-gotten gains.  After this decision, whether or not a claim will be treated as uninsurable disgorgement should be an important consideration by defendants when deciding whether to settle merger objection litigation with a payment to the class.