Directors and Officers

D&O policies are no longer optional or reluctant insurance purchases.  In the last few years insurers have seen a dramatic growth in claims against directors and company executives.  The number of large claims, including class actions, has surged in Australia in recent years on the back of well organised and legitimate funding arrangements and regulatory changes which allow aggrieved claimants to focus not only on directors but personnel in non-executive and management roles.  The Australian Securities and Investments Commission has gathered new revised powers and momentum and has shown no sign of losing enthusiasm in chasing directors and executives even to the point of issuing proceedings against an entire board in the James Hardie case.  Recent high profile decisions in Australia provide a more seamless mechanism for parties like creditors to launch actions against directors.  Securities claims are no longer novel events and Insureds are demanding more comprehensive cover.

Directors and officers claims are usually large and complex and from the outset it is vital that they are handled correctly on behalf of insurers and insureds alike.  Wotton + Kearney have the necessary expertise and experience of acting on behalf of insurers (both primary and excess) and individual directors/officers in a large number of the significant D&O class actions in Australia, together with an involvement in claims in Asia and the United States.  We also regularly act in a significant number of small to medium sized D&O claims, both litigated and non-litigated, involving a broad range of industries.

A small sample of the types of claims (and industries) in which we are involved are:

Insurance, Banking, Financial Services

Wotton + Kearney has also acted on behalf of directors and officers in a number of ASIC and ACCC investigations and prosecutions and in respect of the HIH Royal Commission and subsequent ASIC prosecutions.

Wotton + Kearney is currently acting in a major capacity in a large number of significant matters arising out of the Global Financial Crisis including:

• Allco Finance Group;
• Centro Properties;
• Great Southern;
• Storm Financial;
• City Pacific; and
• Basis Capital.

Mining

• Wotton + Kearney advised the primary D&O insurer of a collapsed gold company regarding policy coverage available to the company and its directors and officers arising from events leading up to it being placed into administration in September 2004.  Separate claims were pursued against directors.
• Wotton + Kearney advised the D&O insurer of a large Magnesium Corporation regarding potential claims arising from difficulties associated with the development and subsequent collapse of the significant project in Queensland.

Managed Investments Scheme

• Wotton + Kearney is acting for the D&O insurer of a group of companies which owned and managed a number of agricultural-based managed investments schemes.  Those companies have gone into liquidation and it is anticipated that there may be claims for insolvent trading.  The quantum of these claims is estimated to be in excess of $3 million.
• Wotton + Kearney acted for the manager of Tea Tree Oil Farming Projects, sued by 200 investors obligated to repay various loans (in excess of $11 million) after the projects determined.  Our retainer in this matter was with reference to an Investment Manager's Insurance Policy.
• Wotton + Kearney successfully acted for a D&O insurer in respect of a claim for indemnity brought in the Federal Court in respect of a number of investors claims arising from a failed property development.

Airlines

• Wotton + Kearney acted for excess layer D&O insurers of a collapsed airline in respect of disputed indemnity.  Various directors were sued in proceedings commenced by a statutory compensation fund.

Australian Clubs

• Wotton + Kearney acts for the D&O insurers of a number of clubs throughout Australia (Bowling Clubs, Racing Clubs, Golf Clubs) pursuant to D&O/PI Scheme policies.  Claims involve defamation, employment practices breaches, and misleading/deceptive conduct.

Tobacco

• Wotton + Kearney acted for the D&O insurers of a global tobacco company in respect of proceedings commenced in the United States and Australia - in particular proceedings commenced by the US Federal Government against various tobacco companies, and attendant Australian proceedings for cross-jurisdictional assistance in respect of evidence.

Asbestos

• Wotton + Kearney acts for a primary D&O insurer in respect of the James Hardie litigation.

Television Networks

• Wotton + Kearney is acting for the D&O insurers of a national television network in respect of disputed indemnity proceedings involving various redundancies.

Petroleum, Telecommunications, Automotive, Gas, Processing

• Wotton + Kearney is acting for the D&O insurers of high profile petroleum and telecommunications companies (now in liquidation).
• Wotton + Kearney acted for the D&O insurers of a national telecommunications carrier in respect of a class action commenced in California.
• Wotton + Kearney acts for the D&O insurers of a multi-national automobile manufacturer based in Germany in respect of proceedings commenced against the company and directors for breach of contract and misleading/deceptive conduct in relation to the sale of assets.
• Wotton + Kearney acts for the D&O insurers of a multi-national computer company in respect of a failed joint venture in the United States.
• Wotton + Kearney acts for the D&O insurers of an international manufacturing company in respect of a leveraged buy-out by various equity partners.
• Wotton + Kearney acts for D&O insurers in respect of a number of notifications arising out of the AWB Investigations.

For more infomation about Wotton + Kearney's Directors and Officers expertise please contact:

cain.jackson@wottonkearney.com.au
adam.chylek@wottonkearney.com.au
patrick.boardman@wottonkearney.com.au