Delaware High Court Grills AIG, Chubb on Harman Post-M&A Accord

Delaware justices pressed units of American International Group Inc. and Chubb Ltd. to explain why they shouldn’t have to pay for a post-M&A settlement with shareholders of Harman International Industries Inc. under policies covering corporate directors and officers.

The Delaware Supreme Court during oral arguments Wednesday asked the insurance giants if factors such as the settlement value and its tax treatment should determine whether such accords are excluded from insurance coverage.

Harman, represented by superstar appellate litigator Paul Clement, argued the insurers were trying to expand a contentious “bump up” exclusion that precludes coverage for settlements that could be characterized ...