Anthony B. Crawford is Chair of the Insurance Coverage Law Practice at Olshan Frome Wolosky LLP. This post is based on his Olshan memorandum and is part of the Delaware law series; links to other posts in the series are available here.
On January 27, 2026, the Delaware Supreme Court affirmed coverage for Harman International Industries, Inc. (“Harman”) in a $28 million federal securities class action settlement. The court held that the D&O policies’ “bump‑up” provision did not apply to exclude the settlement, even though the underlying Section 14(a) claim alleged inadequate deal consideration in connection with a merger. Harman was acquired by Samsung in a reverse triangular merger.[1] Following the closing, a federal securities class action (the “Baum Action”) was filed alleging violations of Section 14(a) due to allegedly misleading proxy disclosures. The complaint alleged that the management projections used to support the board’s recommendation understated Harman’s standalone strategy and value, thereby depriving stockholders of a fully informed vote and full and fair value. The parties reached a $28 million settlement. Harman tendered the settlement to its D&O carriers, who denied coverage under the policies’ “bump‑up” provision.
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