Background of the case

Geostellar Inc., a company that tried to sell subscriptions to solar energy data, filed for bankruptcy and later sued its Yale-educated former CEO, David Levine, for allegedly mismanaging and bankrupting the company. Levine, facing personal liability, sought coverage under Geostellar’s D&O insurance policy with Philadelphia Indemnity, which agreed to cover his legal defense costs. However, the policy was a “wasting” policy, meaning that any defense costs paid by the insurer reduced the overall policy limits available for settlement or future claims.