MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY v. CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON

C.A. No. 4791-VCL.

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, et al., Plaintiffs, v. CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON SUBSCRIBING TO BOND NUMBERS B0391/FD020720g AND B0391/FD020730g, et al., Defendants.

Court of Chancery of Delaware.

Decided: July 23, 2010.


Attorney(s) appearing for the Case

John E. James, John A. Sensing, Michael B. Rush, POTTER ANDERSON & CORROON LLP, Wilmington, Delaware; Timothy W. Burns, Eric G. Barber, PERKINS COIE LLP, Madison, Wisconsin, Attorneys for Plaintiffs.

Allen M. Terrell, Jr., Scott W. Perkins, RICHARDS, LAYTON & FINGER, P.A., Wilmington, Delaware; Larry P. Schiffer, Robert C. Myers, Krista M. Ellis, DEWEY & LEBOEUF LLP, New York, New York, Attorneys for Defendant Certain Underwriters at Lloyd's of London.

Robert J. Katzenstein, SMITH, KATZENSTEIN & FURLOW, LLP, Wilmington, Delaware; John R. Gerstein, Richard J. Pratt, TROUTMAN SANDERS LLP, Washington, District of Columbia, Attorneys for Defendant The Continental Insurance Company.

Robert J. Katzenstein, SMITH, KATZENSTEIN & FURLOW, LLP, Wilmington, Delaware; Joseph R. Marconi, Katherine J. Pronk, JOHNSON & BELL LTD., Chicago, Illinois, Attorneys for Defendant RLI Insurance Company.

Kevin F. Brady, CONNOLLY BOVE LODGE & HUTZ LLP, Wilmington, Delaware; Daniel J. Standish, Howard J. Anglin, WILEY REIN LLP, Washington, District of Columbia; Attorneys for Defendant XL Specialty Insurance Company.

Kevin F. Brady, CONNOLLY BOVE LODGE & HUTZ LLP, Wilmington, Delaware; Ivan J. Dolowich, Michael L. Zigelman, KAUFMAN DOLOWICH VOLUCK & GONZO LLP, Woodbury, New York, Attorneys for Defendant AXIS Insurance Company.

Carmella P. Keener, ROSENTHAL, MONHAIT & GODDESS, P.A., Wilmington, Delaware; John Nocera, Peter Ragone, John P. Foudy, ROSNER NOCERA & RAGONE, LLP, New York, New York; Peter R. Bisio, Douglas S. Crosno, HOGAN & HARTSON, LLP, Washington, District of Columbia, Attorneys for Defendant Federal Insurance Company.

Kevin W. Goldstein, STRADLEY RONON STEVENS & YOUNG LLP, Wilmington, Delaware; Arthur N. Lambert, M. Diane Duszak, FRENKEL LAMBERT WEISS WEISMAN & GORDON LLP, New York, New York, Attorneys for Defendant National Union Fire Insurance Company of Pittsburgh, Pennsylvania.

James W. Semple, Jason C. Jowers, MORRIS JAMES LLP, Wilmington, Delaware; Joseph K. Powers, Edward J. Kirk, Aaron F. Mandel, SEDGWICK, DETERT, MORAN & ARNOLD LLP, New York, New York, Attorneys for Defendant Westchester Fire Insurance Company.

Christian Douglas Wright, Nicholas J. Rohrer, YOUNG CONAWAY STARGATT & TAYLOR, LLP, Wilmington, Delaware; Stephen N. Dratch, FRANZBLAU DRATCH, P.C., Livingston, New Jersey, Attorneys for Defendant Great American Insurance Company.

Francis J. Murphy, Kelley M. Huff, MURPHY & LANDON, Wilmington, Delaware; Lisa L. Shrewsberry, TRAUB LIEBERMAN STRAUS & SHREWSBERRY LLP, Hawthorne, New York, Attorneys for Defendant Zurich American Insurance Company.

John C. Phillips, Jr., PHILLIPS, GOLDMAN & SPENCE, P.A., Wilmington, Delaware; Joan M. Gilbride, KAUFMAN BORGEEST & RYAN LLP, New York, New York, Attorneys for Defendant U.S. Specialty Insurance Company.


MEMORANDUM OPINION

LASTER, Vice Chancellor.

The plaintiffs claim coverage under two insurance towers. The first tower consists of a primary fidelity bond (the "Primary Bond") and excess bonds that generally follow form to the primary bond (the "Bond Tower"). The second tower consists of a primary directors and officers' liability insurance policy (the "D&O Policy") and excess policies that generally follow form to the primary D&O Policy...

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