Jenner & Block

Client Advisory: Stanford Financial's D&O Insurers Enjoined from Unilaterally Refusing Defense Cost Advancement

In this client advisory, Partner Christopher C. Dickinson discusses a decision of the U.S. Court of Appeals for the Fifth Circuit, in which the court enjoined Stanford Financial's D&O insurers from unilaterally refusing advancement of the insureds' defense costs based on the insurers' invocation of a "money laundering" exclusion.  The court held that the determination concerning whether the excluded conduct in fact occurred was to be made by the district court on remand; and that the insurers were "contractually bound to reimburse reasonable defense costs until that merits decision is reached.”