Breaking: Delaware Supreme Court Rules AMC’s $99M Stock Settlement Qualifies as Covered “Loss” Under D&O Insurance – Major Win for Policyholders!
In a landmark decision amid rising D&O insurance disputes 2025, the Delaware Supreme Court has sided with AMC Entertainment in a high-stakes battle over directors and officers insurance, affirming that a settlement paid in company stock counts as a covered “loss.” This ruling impacts AMC stock settlement, D&O coverage rulings, and broader corporate insurance claims.
The Delaware Supreme Court, on December 9, 2025, affirmed a Superior Court judgment without additional commentary, upholding the lower court’s February 28, 2025, opinion. The case stemmed from AMC Entertainment Holdings, Inc.’s 2023 settlement of shareholder litigation, where the company issued approximately 6.9 million shares of common stock—valued at about $99.3 million—to resolve claims related to its preferred equity units (APEs) conversion and reverse stock split.
Insurers, led by excess carrier Midvale Indemnity Company (a subsidiary of American Family Insurance), argued that the non-cash settlement did not constitute a “loss” under the D&O policies, which define “loss” to include settlements or amounts the insured is legally obligated to pay. They contended coverage should be limited to monetary payments and that stock issuance caused no net economic harm to AMC.
The courts disagreed. The Superior Court emphasized that policy language does not restrict “loss” to cash only, noting Delaware law treats stock as a form of currency capable of settling obligations. It refused to insert limiting clauses into the policy and pointed to similar interpretations in bump-up exclusions that contemplate stock transfers.
Expert reactions highlight the ruling’s significance. Michelle Migdon, a partner at Cohen Ziffer Frenchman & McKenna LLP who represented AMC, called it a precedent-setting victory for companies pursuing non-cash settlements. Insurance analysts note it reinforces Delaware’s pro-policyholder trend in D&O disputes, particularly for public companies facing creative capital-raising strategies amid financial pressures.
Public and industry responses have been swift. On professional forums and social media, corporate counsel praise the decision for providing flexibility in settlements during volatile markets, like AMC’s meme stock era post-COVID. Insurers express concern over broadened exposure, potentially leading to higher premiums or tighter policy wording in future renewals.
This outcome carries broad implications for U.S. readers, especially executives, directors, and investors in public companies. In an economy where firms increasingly use equity for liquidity—think tech startups or distressed sectors like entertainment—it assures stronger D&O protection against shareholder suits. Politically and technologically, as boards navigate ESG issues, AI governance, or regulatory scrutiny, robust insurance encourages bold decision-making without fear of personal liability.
Lifestyle impacts hit corporate leaders hard: the ruling eases stress from protracted coverage denials, allowing focus on operations rather than legal fights. For the broader market, it could stabilize stock prices in litigation-heavy environments by signaling reliable backstops for management actions.
The decision also touches on consent-to-settle clauses, with the lower court finding factual disputes over insurer approval that may proceed to trial—reminding policyholders to document communications carefully.
As D&O insurance disputes 2025 evolve, this case underscores Delaware’s pivotal role in shaping corporate governance and risk management nationwide, offering clarity amid ongoing debates over AMC stock settlement, directors and officers insurance, D&O coverage rulings, and corporate insurance claims.
By Mark Smith
Follow us on X @realnewshubs and subscribe for push notifications to stay locked on every US judge orders Kilmar Abrego Garcia’s release from ICE custody development!