David W. Horton

Gibson Dunn advised I Squared Capital on its strategic partnership with Canada Pension Plan Investment Board in Inkia Energy, a Peruvian private power generation company.~~The firm’s corporate team was led by partners Marwan Azzi and Jamal Lama and included of counsel John Kim and associates Vikram Vivek and Maramawit Abera. Partner Kathryn Kelly and associate David Horton advised on tax aspects. Partner Attila Borsos advised on antitrust aspects.~~Download PDF~~

Feb 12

1 min

A Connecticut judge has approved a modified moratorium that protects PHL Variable Insurance Co. and two subsidiaries during a state rehabilitation, agreeing to a plan that could reduce universal life death benefits by $4.1 billion while allowing policyholders the option to avoid paying $175 million in estimated total premiums. Waterbury Superior Court Judge Daniel J. Klau's Tuesday order also allows modifications that could allow other policyholders to access between $39 million and $52.3 million in value from separate fixed indexed annuity accounts. Connecticut Insurance Commissioner Andrew N. Mais sought the alterations to a June 5, 2024, moratorium that capped death benefit payouts. PHL consented to the rescue effort one month earlier to shore up policy claims of $100 million per quarter, court records show. According to Judge Klau, Mais' proposal created an issue of first impression of Connecticut. Though the judge favorably cited portions of a 2022 Delaware Chancery Court decision regarding an insurance rescue effort in that state, he declined to follow its reasoning in full, instead saying Mais "need only establish that the proposed action is rational, not arbitrary or capricious, under the circumstances." Judge Klau accepted the commissioner's proposal under that standard of review and said several objectors failed to show Mais was acting irrationally, fraudulently or in bad faith. Under Mais' modifications, universal life policyholders can choose three separate options. Those policyholders can either maintain current coverage by paying current premiums, pay reduced premiums for reduced benefits, or "convert their policy to a claim for a fixed amount … with no ongoing cost of insurance or premium payments," the judge said. Fixed indexed annuity policyholders can maintain current coverage, receive one-time distributions or activate income riders, Judge Klau noted. The original moratorium allowed one of two options, leading to objections from high-value policyholders. Under the 2024 plan, policyholders could either continue to pay premiums "knowing that the stated benefit likely will not be paid in full, but not knowing the extent of the likely discount," the judge said. Or, they could stop paying altogether and seek their policy's cash surrender value, likely at a "significant loss," Judge Klau wrote. Mais' modifications "do not eliminate this dilemma entirely, but they soften its edges significantly" for universal life policyholders, the judge ruled, concluding Mais' modifications were legally sound. In an Oct. 24 memorandum, BroadRiver Asset Management LP, which objected to the modifications, said universal life policyholders have paid full premiums despite the moratorium's $300,000 cap on death benefits. According to BroadRiver, it is neither fair nor equitable for the holders of policies under $300,000 to have received full death benefit payouts while high-value policyholders would receive only a fraction of the policies they purchased. BroadRiver said it was "unaware of any insolvency proceeding that permits discrimination between similarly-situated creditors solely on the basis of the quantum of the claim." Another objector, Obra Capital Inc., said Connecticut insurance law "does not and cannot give the rehabilitator carte blanche to undertake actions that prejudice certain policyholders over others, nor does it open the door to arbitrary decisions that may negatively affect the value of the estate, to the detriment of larger policyholders." In an Oct. 7 reply, Mais said it was impossible to entirely predict the effects of the modifications on PHL's estate, but he estimated two of the new universal life options would likely trim payments to PHL by $165 to $175 million. "The tradeoff for the reduction in incoming premium would be enormous," Mais offered. "If all eligible holders of UL Policies were to elect one of UL options 2 or 3, there would be no immediate cash outlay from PHL and the aggregate face amount of death benefits under all UL policies would be reduced by approximately $4.1 billion." That figure accounts for a potential slash in PHL's universal life policies from current face values of $5.95 billion to $1.85 billion, helping keep the struggling insurer solvent, Mais said. Quoting Mais, Judge Klau agreed the modified moratorium "strikes a balance by giving all policyholders access to cash distributions up to the amount that they would be guaranteed to receive in any liquidation, while also preserving PHL estate assets so that a rehabilitation can be pursued primarily for the benefit of policyholders whose policy limits exceed guaranty association limits." A spokesperson for the Connecticut Insurance Department declined to immediately comment on Wednesday. Attorneys for BroadRiver and Obra did not immediately respond to requests for comment. The insurance commissioner is represented by Harold S. Horwich and Benjamin J. Cordiano of Morgan Lewis & Bockius LLP. BroadRiver is represented by John L. Cesaroni of Zeisler & Zeisler PC and David W. Wirt, David J. Fischer and Richard A. Bixter Jr. of Holland & Knight LLP. Obra Capital is represented by Debra O'Gorman, Victor Noskov and Carolina Yu of Quinn Emanuel Urquhart & Sullivan LLP. The case is Insurance Commissioner of the State of Connecticut v. PHL Variable Insurance Co. et al., case number UWY-CV24-6085274-S, in the Waterbury Judicial District of the Connecticut Superior Court.

Dec 3

4 min

Gibson Dunn advised Reload, a platform that sites, designs, and permits gigawatt-scale data center campuses paired with rapidly deployable on-site power infrastructure, on its sale to Scale, a leading vertically integrated provider of advanced energy solutions backed by EQT.~~Our corporate team was led by partners Marwan Azzi and Jamal Lama and included partner Emad Khalil and associate Chris Ayers. Partner Kathryn Kelly and associate David Horton advised on tax aspects. Partner Kate Napalkova and associate Akiva Reich advised on benefits.~~Download PDF~~

Feb 23

1 min

Insurance broker Marsh & McLennan Agency told a New York federal court that its competitor carried out a coordinated scheme to poach an experienced employee with a roster of high-value clients to bulk up its recently launched yacht insurance practice. In a complaint filed Tuesday, Marsh says former employee Kathleen Johnson breached a non-solicitation and confidentiality agreement and, together with Alliant Insurance Services Inc., misappropriated Marsh's trade secrets in violation of the Defend Trade Secrets Act. Marsh, which provides risk management services for large, high-value private vessels, says Alliant launched its own yacht insurance practice this year. "Rather than invest the time, expertise, and resources necessary to build such a practice lawfully, Alliant chose the shortcut that has triggered more than seventy lawsuits in the last decade," Marsh says. Alliant "targeted a competitor's practice, its confidential information, and a key employee who could deliver those client relationships to Alliant." In this case, that key employee was Johnson, who joined Marsh's yacht practice in 2003 and was promoted to yacht specialty manager in July 2024, before her departure in August. "Alliant recruited Johnson for her access to the clients and confidential information that Marsh had spent decades developing," Marsh alleges. When Johnson joined Marsh, she signed a nonsolicitation and confidentiality agreement, agreeing not to solicit any of Marsh's clients or employees for two years following her separation from the company, the complaint says. She also agreed not to divulge Marsh's confidential information and trade secrets either during her employment or after. Alliant recruited Johnson, one of the most senior yacht specialists in the industry and at Marsh, even though the company knew she was bound by post-employment restrictive covenants, which are standard in the insurance brokerage industry, Marsh contends. Marsh alleges that Johnson, while she was still employed at Marsh, secretly coordinated with Alliant, concealed that she accepted an offer to join the rival company, provided Alliant with confidential information about Marsh's clients, and assisted Alliant in identifying additional March personnel for recruitment. One of the Marsh employees she identified was Bryan Kunnemann, who left Marsh for Alliant shortly after Johnson, the complaint says. "Within weeks, multiple long-standing MMA yacht clients for whom Johnson had been responsible submitted broker-of-record letters naming Alliant as their new broker," Marsh says. The company contends that Alliant has a decade-long history of growing its business by poaching its competitors' employees and using them to capture its competitors' clients. "Alliant undertakes its raids with full awareness that its conduct is unlawful and will result not only in litigation but in the payment of damages," Marsh says. "Courts have already found that Alliant builds these expected losses into its business model from the outset." The company alleges that Johnson not only breached the non-solicitation and confidentiality agreement, but also her duties of loyalty and utmost good faith to the company by acting in Alliant's interests while still employed by Marsh. Alliant knowingly participated in said breaches, Marsh says. Alliant tortiously interfered in Marsh's contracts with Johnson by enticing her to breach her contractual obligations to her former employer, the complaint says, adding that together, Alliant and Johnson also intentionally and improperly interfered with Marsh's client relationships. In addition to seeking direct, consequential and punitive damages and attorney fees, Marsh says it is entitled to an order preventing Johnson from committing additional violations of the non-solicitation and confidentiality agreement and extending the length of restrictions under the agreement. Marsh says it is also entitled to recover any compensation that it paid to Johnson during the alleged period of disloyalty. Representatives of the parties did not immediately respond to requests for comment Wednesday. MMA is represented by David W. Garland and A. Millie Warner of Epstein Becker & Green PC. Counsel information for Alliant and Johnson was not available. The case is Marsh & McLennan Agency LLC v. Alliant Insurance Services Inc. et al., case number 1:25-cv-09837, in the U.S. District Court for the Southern District of New York.

Nov 26

3 min

A New York federal court issued a preliminary injunction barring California-based insurance broker Alliant and two employees from soliciting and accepting the workers' former Marsh & McLennan Agency clients, yet refused to prevent their continued servicing of clients who have already moved their business to Alliant. In an order Monday, U.S. District Judge Ronnie Abrams concluded that Marsh is entitled to limited injunctive relief against Alliant Insurance Services Inc. and employees Andrew Oldenburg and Elizabeth McKinney, but not as to two additional employees, Kimberly Moore and Danielle Black. The judge also denied as moot Marsh's application for a temporary restraining order and denied without prejudice Marsh's bid for expedited discovery, saying the broker has neither demonstrated how its ongoing harm justifies the need for expedited discovery nor identified the specific discovery it seeks. According to court filings, Oldenburg previously worked for and owned a portion of Montana-based insurance broker PayneWest, which Marsh acquired in April 2021. As part of the purchase, Oldenburg agreed to work for Marsh and to sell his PayneWest shares to the broker. He also signed a restrictive covenant agreement in effect through April 1, 2026, which included provisions limiting his professional activities if he were to leave Marsh. Oldenburg's client service team, including McKinney, Moore and Black, also moved from PayneWest to Marsh, court documents stated. All four employees signed nonsolicitation agreements restricting their ability to solicit and serve Marsh clients and employees. In July, Oldenburg resigned from Marsh and filed a suit in Oregon state court, seeking to have the provisions of his RCA and NSA declared unenforceable. McKinney, Moore and Black also resigned from Marsh, and within days, all four had joined Alliant, according to court filings. Following the departures, a number of the employees' former Marsh clients began to transition their business to Alliant, according to court documents. Marsh filed the present action in August, accusing the former employees of breaching the respective agreements they signed when joining Marsh. The broker also accused Alliant of aiding and abetting Oldenburg's alleged breach of the duty of loyalty, and improperly interfering with Marsh's business relations and its contracts with the former employees. Judge Abrams held Monday that Marsh is entitled to limited injunctive relief against Alliant, Oldenburg and McKinney because it has demonstrated that it is likely to succeed on the merits of at least some of its claims against those defendants. First, the judge said, Marsh has shown that Oldenburg and McKinney have breached the express terms of the NSAs by soliciting, accepting, and servicing former Marsh clients at Alliant. However, Marsh has not yet demonstrated that Moore or Black are also engaged in servicing or soliciting their former Marsh clients at Alliant, the judge said. Judge Abrams further held that the NSAs are enforceable under New York law. As for the RCA, the judge found that the agreement's "restrictions on Oldenburg's solicitation of prospective clients are overbroad, unreasonable and unenforceable." While a portion of the RCA is unenforceable, Judge Abrams held that partial enforcement of the agreement's valid provisions, including restrictions on PayneWest clients, is appropriate. With respect to Marsh's tortious interference of contract claim, the judge found that the broker has not yet provided evidence that Alliant had actual knowledge of the agreements' terms. However, Judge Abrams said, Marsh has met its burden of establishing that there is a strong likelihood that it will eventually be able to prove Alliant's knowledge of the agreements. Marsh has also shown that it's likely to suffer irreparable harm, in the form of the loss of client relationships and customer goodwill, without an injunction barring Alliant from accepting former Marsh clients in violation of the RCA and NSAs, Judge Abrams held. However, an injunction barring Alliant and the employees from continuing to service former Marsh clients that they already solicited and accepted would not remedy Marsh's alleged harm, the judge said. "The balance of the equities and the public interest both favor the limited preliminary injunction imposed in this order," Judge Abrams added. Representatives of the parties did not immediately respond to requests for comment Tuesday. Marsh is represented by David W. Garland and A. Millie Warner of Epstein Becker Green. Alliant and the employees are represented by Timothy J. Stephens, Karen P. Pohlmann, Cassidy D. Britt and Peter M. Fay of Morgan Lewis & Bockius LLP. The case is Marsh & McLennan Agency LLC v. Alliant Insurance Services Inc. et al., case number 1:25-cv-06936, in the U.S. District Court for the Southern District of New York.

Dec 2

3 min