Helfand

I. Introduction and Background

This appeal is but one round in the complex, bitter legal battle between the defrauded investors of Technical Equities Corporation (Technical Equities) and its insurer—appellant National Union Fire Insurance Company of Pittsburgh, Pa. (National Union). At stake are millions of dollars in insurance proceeds to pay for claims which the investors pursued against the officers and directors of Technical Equities and over $140 million in damages later assessed against National Union.

National Union is the liability insurer of the directors and officers of Technical Equities. Respondents Leonard and Eileen Helfand (plaintiffs) invested in securities offered by Technical Equities, only to find their investment substantially worthless after the company’s financial collapse and bankruptcy. Hundreds of investors like plaintiffs have sued the company’s directors and officers; multiple judgments have been entered in these suits against them for economic losses, emotional distress and prejudgment interest.

Plaintiffs’ action is for declaratory relief to determine the scope of coverage under the “Directors and Officers Liability and Corporation…