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Lions Gate Entertainment vs Navigators Insurance

Lions Gate Entertainment vs Navigators Insurance

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Published by jlweinstein

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Published by: jlweinstein on Aug 03, 2011
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08/03/2011

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DICKSTEIN
SHAPIRQllP
.;
.
KirkA,Pasich(CAStateBarNo,94242)\'/\,-
pasicbk@c!icksteinshapiro,com
1"\\7
V\
StephenN.Goldberg(CAStateBarNo.57122)
~\,,\J~~
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Julie
E.
Gough(CAStateBarNo.271837)
ffi\.J
goughj@}dicksteinshapiro.com
\I\
DICKSTEINSHAPIROLLP
2049Century
ParkEast,
Suite
700LosAngeles,California90067-3109Telephone:(310)
772-8300Facsimile:(310)772-8301
AttorneysforPlaintiffLlONSGATEENTERTAINMENTCORP.
2
3
FILED
a.o.
AnBetnS~p.rlor
Court
AUG012D11
r~~J:~
DanielleL,Gilmore(CAStateBarNo.l71457)
danie1Iegilmore@quinnemanuel.comShaneMcKenzie(CAStateBarNo.228978)
shanemckenzieralquilmemanuel.comQUfNNEMANUEL
URQUHART
&
SULLIVAN,LLP
865SouthFigueroaStreet,10thFloorLosAngeles,California90017
Telephone:(213)443-3000
Facsimile:(213)443-3100
Andrew
J.
Rossman
(pro
hac
vice
applicationpending)
andrewrossmanrgquinnemanuel.com
QUINNEMANUELURQUHART
&
SULLIVAN,LLP51Madison
Avenue)
22ndFloorNewYork,
New
York10010
Telephone:(212)849-7000
Facsimile:(212)&49
w
7100
AttorneysforPlaintiff
DR.MARKRACHESKY
SUPERIORCOURTOFTHESTATEOFCALIFORNIA
FORTHECOUNTYOFLOS
ANGELES
8
9
UONSGATEENTERTAINMENTCORP.,
a
British
Columbiacorporation;
and
DR.MARKRACHESKY.
an
individual!
Plaintiffs.
VS.
NAVIGATORSINSURANCECOMPANY,aNewYorkCorporation;Defendant.
CaseNo..
BC46'6507
COMPLAINT
FOR
DECLAR~~i!~
9
RELIEF,BREACHOF
CONT:RXC,:f;'~~
ANDTORTIOUS
BRE~~.kOR
THE:.s~
IMPLIED
COVENAN1iOFteOOD7~;
FAITHAND
FAIR
IiEAlI.:1NG
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DEMANDFORJURYTRINL;;;~~
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COMPLAINT
OOCSl..,..·175S7
 
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2728
DICKSTEIN
SHAPIROLlP
PlaintiffsLionsGate
Entertainment
Corp.("LionsGate")andOr.MarkRachesky
("Rachesky")complainof
Defendant
NavigatorsInsuranceCompany("Navigator')andallegeasfollows:
NATUREOFtHISACTIONAND
RELIEFSOUGHT
1.NavigatorssoldLionsGatea$1
O.OOO~OOO
irectorsand
officers
("D&O'»)
liability
insurancepolicy(the"Policy").TheprimarypurposeforthePolicywastoprovide,amongotherbenefits,protection
for
Lions
Gate
anditsdirectors,officers.andemployeesintheeventthat
claims
were
made
againstanyof
them
forallegedwrongfulacts.Navigators
is
asophisticated
insurance
company,is
familiar
with
andunderstands
the
needsandbusinesses
of
itscorporate
insureds
andtheirdirectorsandofficers)andholdsitself
out
asaninsurerthatprovidesexpeditiousandequitableclaimshandling.lnthewordsofitswebsite:
<'WEARECOMM1TTEDTOPROMPTAND
EQUITABLE
CLAIMSHANDLING.
Handlinga
claim
istheabsolutemomentoftruthbetweenaninsurerandapolicyholder.Youcantrustthatwe
will
betherewithnotonlytheknowledge.butthedesiretoresolveclaimsexpeditiouslyand
fairly."
[http://www.navg.comlPages/why-
navigators.aspx
?p=
1
&s""
1]
2.Theeventualitythatthepolicysold
by
Navigatorstocoveroccurred:LionsGateandRachesky,adirectorofLionsGateandthusaninsuredunder(hePolicy,werenamedasdefendants
intwolawsuitsandfourBritishColumbiaSecuritiesCommission
proceedings
initiated
byorbecauseofCarl
C.
Icahn,amajorLionsGate
shareholder,
andotherentitiescontrolled
by
lcahn(collectively.vlcahn").The
first
lawsuitwas
initiated
intheSupremeCourtofBritishColumbia(the
"BritishColumbiaAction"),andthesecond
lawsuit
wasinitiatedinthe
Supreme
Court
of
theState
ofNewYork(the«NewYorkAction").ThetwolawsuitsandvariousaspectsoftheproceedingsbeforetheBritishColumbiaSecuritiesCommissiondealtwithtwofinancialtransactions(the'<Impugned
Transactions").The
firstwasadeleveragingtransaction,
approved
by
Lion
Gate's
BoardofDirectors,inwhichLionsGateEntertainmentCorp.exchangedapproximately
$loo
millioninconvertiblenotesheld
by
anoutsideinvestmentcompanyfornewconvertiblenotes.The
second
wasthesale
by
theoutsideinvestmentcompanyofthenewconvertiblenotesto
Dr.Rachesky's
2
COMPLAINT
OQCSI..A·?7$S7
 
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DICK$~IN
SHAPII«JU,P
company,whichpurchasedthe
new
notesand
exercised
theirconversion
option,
therebyobtaining
16,236,305
common
sharesofLions
Gate.3.ThetwolawsuitsandfourBritishColumbiaSecuritiesCommissionproceedingsare"Claims"expresslycoveredbythePolicy.LionsGatetimelyandappropriatelynotifiedNavigatorsoftheselawsuitsandproceedingsandaskedNavigatorstoassumeitsdutiesunderthePolicytoitsrespectiveinsureds.
4.Navigatorshas
soughtto
depriveLionsGate
andRachesky
ofthefinancialsecurityandprotectionthatweretheprimaryreasonsfor
Lions
Gate's'purchaseofthe
Policyinstead
of
honoringitsduties.Asofthedateof
this
Complaint,Lions
Gate
andRacheskyhaveincurredinexcessof$1O~OOO,OOOfexpensesdefendingthetwolawsuitsandmultiplesecuritiesproceedings,ofwhichNavigatorshasreimbursedLionsGateonly$2,067J013.SO.Navigatorshasimproperly
refused,to
reimburse
Lions
Gate
andRacheskyforthe
$7,932,986.20
remainingofthe.Policy
limitseventhough
itacknowledgesthatthe
Policyatleastprovides
coverage
to
LionsGatefortheBritish
Columbia
andtheNew
York
Actions.5.Navigators'conductisinbreachofcontract,iscontrary
to
thedutyofgoodfaithandfairdealingthat
it
owestoLionsGateanditsdirectorsandofficers,includingRachesky,and
constitutesbad
faith.
THEPARTIES
6.
Plaintiff
LionsGateisacorporationorganizedunderthelawsof
BritishColumbia,
Canada,withitsprincipalplaceofbusinessin
Santa
Monica,California.
Lions
Gateisauthorizedtotransactandis
transacting
businessintheStateofCaliforniaandintheCountyofLosAngeles.LionsGateisaleadingglobalentertainmentcompanywithastronganddiversifiedpresenceinmotionpictureproductionanddistribution,televisionprogrammingandsyndication,
home
entertainment,familyentertainment,digitaldistribution.andnew
channel
platforms,
7.PlaintiffRacheskyisandwasatall
relevanttimesamemberof
the
BoardofDirectorsofLionsGate.RacheskyresidesinNewYorkState.
S.Plaintiffsare
informed
and
believe)andbasedthereon
allege.
thatDefendantNavigatorsis
a
NewYorkcorporationwithitsprincipalplaceofbusinessinRyeBrook,NewYork.
3
COMPLA1NT
DOCSLA·77SS7

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