The U.S. Court of Appeals for the Eighth Circuit has overturned the lower court's ruling in favor of an insurer in a directors and officers (D&O) lawsuit on the issue of whether the D&O policy required the insurer to indemnify and defend a company and its chief executive officer against claims brought by investors, stating that the policy was ambiguous on this point. The case is Verto Med. Sols., L.L.C. v. Allied World Specialty Ins. Co., No. 19-3511, 2021 U.S. App. LEXIS 13830 (8th Cir. May 11, 2021).

According to the ruling, Seth Burgett, founder of Verto Medical Solutions, L.L.C., a headphone manufacturer, sold the company to Harman International Industries Inc.

To gain the approval of Verto's investors, Burgett agreed to reallocate a portion of the payments made in connection with the deal to the investors.