The Delaware Superior Court, applying Delaware law, held that a public offering exclusion does not bar coverage for a de-SPAC merger because the transaction did not constitute a public offering of the insured company’s securities. View Operating Corp. v. Starstone Specialty Insurance Co., 2026 WL 895939 (Del. Super. Ct. Mar. 30, 2026). The court further held that the insurer was required to advance defense costs on behalf of a former officer upon the accrual of liability, not the act of payment by the insured company.
This dispute arose from a 2021 de-SPAC transaction in which the plaintiff insured, a private company, merged with a special purpose acquisition company (“SPAC”) and became a wholly owned subsidiary of the resulting public parent. As part of the merger, the insured’s shares were cancelled and converted into interests in the parent entity, whose shares were thereafter publicly traded. After the merger closed, the public parent company disclosed accounting irregularities
