Axis Says Tilton Bought $5M Policy While Under SEC Scrutiny
Troutman Sanders partner Jack Gerstein is quoted in an Oct. 21 Law360article covering a court hearing in the United States District Court for the Southern District of New York in a lawsuit between Troutman client Axis Insurance Company and Patriarch Partners (a large investment fund). The dispute relates to a D&O insurance policy that Patriarch purchased from Axis. The article quotes Jack as telling Judge Valerie Caproni that depositions have borne out Axis’ assertion that Patriarch – set to go before an SEC judge in a $200 million enforcement action – is barred from coverage based on policy language precluding coverage for “prior and pending” matters, because the SEC formal investigation that preceded the current enforcement action commenced prior to Patriarch’s purchase of the subject Axis policy. Jack’s statement prompted the Judge to respond, in apparent great surprise (and as quoted in the same article): “Wait a minute – they were under formal investigation before they applied for coverage?” Point made.