Attorneys for Oracle Corp. are asking a Delaware judge to order an insurer to pay $20 million to cover attorney fees related to the proposed settlement of a shareholder lawsuit.
The lawsuit challenged Oracle’s 2011 acquisition of Pillar Data Systems, a company majority-owned by Oracle CEO Larry Ellison.
Shareholders alleged that the deal improperly benefited Ellison at the expense of other Oracle stockholders. Ellison agreed to forego virtually all the payments he stood to receive, based on Pillar’s future performance, to settle the case. Those payments initially were estimated at upward of $500 million but more recently valued at zero.
The shareholder attorneys are seeking $19.9 million from Oracle’s officer and directors as part of the settlement, but an insurer covering the officers and directors has balked at paying.
[Oracle’s regulatory filings state London-based Beazley had issued a directors’ and officers’ insurance policy to Oracle. Last September, defendants in the Pillar derivative case filed a third-party complaint, alleging that Beazley improperly denied coverage.]