The United States District Court for the Northern District of California, applying California law, has held that two former directors and officers were entitled to advancement of defense costs incurred in connection with SEC subpoenas based on the “potentially covered” claim standard. AmTrust Int’l Underwriters DAC v. 180 Life Sciences Corp., 2024 WL 557724 (N.D. Cal. Feb. 12, 2024)
The policies’ Advancement clause provided that “the Insurer shall advance Defense Costs . . . not less often than every 90 days and prior to final disposition of the Claim.” The Advancement clause provided further that “[s]uch advanced payments by the Insurer shall be repaid to the Insurer” in the event the “Insured shall not be entitled … to payment of such Loss.” The policies’ Change in Control Exclusion applied if the SEC subpoenas were construed to allege “in whole or in part” any “Wrongful Acts committed, attempted or allegedly committed or attempted by any Insured” after the merger date.
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- Source: https://spacfeed.com/california-spac-entitled-to-advancement-of-subpoena-related-costs-post-name-change-based-on-potentially-covered-standard-2
