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On December 1, 2016, Parker Hannifin Corporation and CLARCOR Inc. announced that the companies have entered into a definitive agreement under which Parker will acquire CLARCOR for approximately $4.3 billion in cash, including the assumption of net debt. The transaction has been unanimously approved by the board of directors of each company. Upon closing of the transaction, expected to be completed by or during the first quarter of Parker’s fiscal year 2018, CLARCOR will be combined with Parker’s Filtration Group to form a leading and diverse global filtration business. Bass, Berry & Sims has served CLARCOR as primary corporate and securities counsel for 10 years and served as lead counsel on this transaction. Read more here.

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Blueprint for an IPO

Companies go public to raise capital to fuel growth, pay down debt and provide liquidity to shareholders. Although all issuers and offerings are different, the basic process of going public remains relatively constant. Blueprint for an IPO identifies the key players, details the process and identifies the obligations companies will face after going public.

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Chris Lazarini Comments on Ambiguity in Insurance Policy

Securities Litigation Commentator

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December 12, 2016

Bass, Berry & Sims attorney Chris Lazarini commented a case in which a broker-dealer claimed the term "final judgment" in its insurance policy was ambiguous and should be construed against its insurance carrier, as is typical in most cases. However, the court, finding no ambiguity in the clause, affirmed summary judgment for the insurance carrier.

Chris provided the analysis for Securities Litigation Commentator (SLC). The full text of the analysis is below and used with permission from the publication. If you would like to receive additional content from the SLC, please visit the SLC website to sign up for the newsletter.

Hantz Financial Services, Inc. vs. American International Specialty Lines Ins. Co. & National Union Fire Ins. Co. of Pittsburgh, No. 15-2237 (6th Cir., 11/9/16) 

* If a term in an insurance policy is ambiguous, it should be construed against the insurer; however, courts should not read ambiguity into a policy where none exists.
** "Final judgment" is a term of art meaning a judgment at the trial court level ending litigation on the merits. 

Between 2000 and 2008, an employee of broker-dealer Hantz Financial stole more than $2.6 million from firm clients. By July 2009, Hantz had settled the claims of 20 clients without litigation and one FINRA arbitration before the final hearing. The firm unsuccessfully defended another FINRA arbitration (FINRA ID #09-03846 (Detroit, 6/15/10). The adverse Award was confirmed in state court in December 2010, and affirmed on appeal in January 2012.

During this period, Hantz communicated regularly with its carriers, National Union (Fidelity Bond) and AISLIC (E&O Policy). In March 2013, Hantz sued the carriers after National Union denied coverage and AISLIC failed to send a final coverage decision. The district court granted Defendants' motions for summary judgment, finding Hantz's loss was not "direct" as required by the Fidelity Bond and applying an exclusion in the E&O Policy for the employee's "knowingly" wrongful acts (see SLA 2015-37). 

Conducting a de novo review, the Court of Appeals first examines the Fidelity Bond. Declining to address whether Hantz's losses were "direct" losses, it focuses instead on the threshold question of whether Hantz sued within the Fidelity Bond's contractual limitations provision, which requires suits to be brought within 24 months of settlement or final judgment. Hantz conceded that its claims on the settlements with non-litigants fell outside of the time period, but argued that National Union implicitly waived the limitations period on the settled arbitration by requiring Hantz to cooperate in a lengthy investigation. The Court disagrees, finding no evidence that National Union induced Hantz to believe it would not enforce the limitations clause. Instead, the evidence shows that National Union stated repeatedly that it was not waiving any rights or defenses under the Fidelity Bond.

As to the arbitration that was tried to an adverse Award, Hantz contended that the term "final judgment," as it appears in the limitations clause, was ambiguous and should be construed against National Union, so as to capture the time during which Hantz appealed the district court's decision. Rejecting this argument, the Court finds no ambiguity, citing the almost universal agreement among Michigan and federal courts that the judgment of a trial court ending litigation on the merits is a "final judgment." The Court therefore affirms summary judgment for National Union, although for different reasons than the trial court.

The Court affirms summary judgment for AISLIC through the "knowingly" wrongful conduct exclusion, rejecting Hantz's argument that the district court's decision rendered its failure to supervise rider illusory. The rider is not illusory because it covered negligent supervision claims arising out of the negligent conduct of Hantz's employees.


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