A Delaware judge Thursday dismissed a lawsuit filed by renewable energy company and its CEO seeking coverage from directors and officers insurers for a fraud lawsuit filed by investors.
The judge in Origis USA LLC et al. v. Great American Insurance Co. et al. ruled a tower of primary and excess D&O policies in effect from 2021 to 2022 contained an unambiguous no-action clause barring the policyholders from bringing a coverage dispute until after a determination is made as to how much they must pay.
Miami-based Origis and CEO Guy Vanderhaegen failed to convince the judge that the clause was “draconian” and that courts nationwide typically don’t favor enforcing the provisions, court records show.
“Even accepting that premise, Delaware courts are exceptionally inclined to hold sophisticated parties to their bargains,” the judge wrote.
The judge also said a prior acts exclusion in a tower of primary and excess D&O policies in effect from 2023 to 2024 relieved the insurers from defending against the 2023 fraud lawsuit filed by investors because the alleged conduct by Origis and Mr. Vanderhaegen occurred before the policies’ November 2021 retroactive date.
Origis’ 2021-2022 tower of D&O consisted of a primary policy issued by Great American and excess policies from North American Specialty Insurance Co., Axis Insurance Co. and Markel American Insurance Co. The 2023-2024 tower contained a primary policy issued by Bridgeway Insurance Co. and excess policies from RSU Insurance Co., Ascot Specialty Insurance Co., Endurance Assurance Co., Berkshire Hathaway Specialty Insurance Corp., Ironshore Indemnity Inc., Markel and American International Group Inc. unit National Union Fire Insurance Co. of Pittsburgh, Pa.
Origis and Mr. Vanderhaegen sought coverage under the two towers of D&O coverage for the lawsuit originally filed in New York state court in February 2023. Belgium-based corporations Pentacon BV and Baltisse NV and former Origis investors Paul Thiers Sr. and Filip Balcaen accused Origis and Mr. Vanderhaegen of undervaluing the company before buying out investors for $105 million in October 2020 and selling the company in January 2021 for $1.4 billion. The case was later removed to federal court.
The judge in the coverage dispute ruled that the majority of the allegations of wrongdoing in the investors’ lawsuit occurred prior to November 2021 and therefore were not subject to the second tower’s policies.
Representatives for the parties did not respond to requests for comment.
