Electro Scientific Industries, Inc. Coverage Litigation
We represented Electro Scientific Industries, Inc. (“ESI”) in an insurance coverage lawsuit against National Union Insurance Company of Pittsburgh, an AIG company. National Union provided ESI with Directors’ and Officers’ insurance coverage. As a result of accounting irregularities and restated earnings, ESI was faced with class action and shareholder derivative lawsuits and an investigation by the SEC. The lawsuits were settled, with funding from both ESI and National Union. However, National Union refused to pay any of the attorneys’ fees incurred by ESI and insured individuals, and National Union extracted a renewal at substantially above-market rates as a condition of its contribution to the settlement.
On behalf of ESI, we filed suit against National Union, alleging breach of contract, bad faith, intentional interference with contract, and fraud, and seeking several million dollars in compensatory damages plus punitive damages. The coverage litigation was settled on favorable terms for ESI in December 2006, and the case was dismissed in January 2007.
James T. McDermott (litigation partner) and Kevin S. Mapes (litigation partner) represented Electro Scientific Industries, Inc.