Delaware Court: De-SPAC D&O Insurance Covers Claims, Exclusion Doesn't Apply
Delaware Superior Court ruled the 'public offering' exclusion doesn't bar D&O coverage for de-SPAC claims.
Why it matters: This decision sets a precedent for D&O insurance coverage in de-SPAC transactions, offering clarity for legal and risk teams. As SPAC deal activity rises, law firms and in-house counsel must reassess insurance strategies.
- On March 30, 2026, the Delaware Superior Court sided with View Operating Corporation in a D&O insurance dispute.
- The court held that a de-SPAC merger is not a public offering, so the 'public offering' exclusion does not apply.
- Judge Sheldon K. Rennie emphasized that de-SPACs are specifically designed to avoid public offerings.
- This decision follows a January 2026 Delaware Supreme Court case favoring coverage in a $28M settlement.
The March 30, 2026, decision from the Delaware Superior Court addressed whether View Operating Corporation’s Directors and Officers (D&O) insurance covered claims following its de-SPAC merger. Insurers had argued coverage should be denied based on the policy’s 'public offering' exclusion.
- The court held that the de-SPAC merger did not amount to a public offering of securities. Judge Sheldon K. Rennie wrote, “The entire purpose of a de-SPAC merger is to avoid a public offering of the private company’s shares.”
- The ruling offers new guidance on the boundaries of D&O coverage for de-SPAC transactions, especially as special purpose acquisition company (SPAC) activity shows signs of renewed life.
- This continues a trend in Delaware courts ruling for policyholders in insurance disputes. In January 2026, the Delaware Supreme Court ruled that a 'bump-up' exclusion did not block coverage for a $28 million securities settlement involving Harman International Industries.
For in-house legal teams and law firm advisors working on SPAC or de-SPAC deals, the View Operating case clarifies that D&O coverage may still be available after a de-SPAC merger. With more transactions on the horizon, insurers may revisit policy wording and exclusions.
Industry observers expect ongoing legal scrutiny and possible policy revisions as SPAC structures evolve and litigation risks change. For now, policyholders have a clearer argument for coverage in Delaware courts.
By the numbers:
- March 30, 2026 — Date of Superior Court ruling favoring coverage
- January 27, 2026 — Delaware Supreme Court sided with policyholder in $28M settlement case
- $28 million — Size of the Harman International Industries settlement
Yes, but: Specifics of the underlying claims against View Operating Corporation and broader impacts on future D&O policy drafting remain uncertain.
What's next: SPAC deal resurgence may prompt insurers to revise exclusions; future litigation could test the boundaries of this precedent.