The Delaware Supreme Court has affirmed a Superior Court ruling against two major insurance carriers in a coverage dispute with Harman International Industries, dealing a setback to Illinois National Insurance Company (AIG) and Federal Insurance Company (Chubb) in litigation stemming from Samsung's 2017 acquisition of the audio equipment manufacturer.
The en banc decision, issued January 27, 2026, unanimously upheld the lower court's ruling in favor of Harman International. The case, *Illinois National Insurance Company and Federal Insurance Company v. Harman International Industries, Incorporated* (Del. 2026), emerged from complex insurance coverage questions following Samsung Electronics Co., Ltd.'s acquisition of Harman in 2017.
The dispute centers on coverage obligations related to securities litigation that arose after the Samsung transaction. According to court documents, former Harman shareholders filed a class action lawsuit alleging that disclosures made in connection with the 2017 acquisition violated federal securities laws. This underlying litigation triggered the insurance coverage dispute between Harman and its insurers.
The case involved three insurance companies: Illinois National Insurance Company (AIG), Federal Insurance Company (Chubb), and Berkley Insurance Company. However, only AIG and Chubb appealed the Superior Court's decision to the Delaware Supreme Court, while Berkley did not participate in the appeal.
Justice Valihura authored the majority opinion for the five-member en banc court, which included Chief Justice Seitz and Justices Traynor, Legrow, and Griffiths. The unanimous nature of the decision suggests the court found the legal issues relatively clear-cut, though the specific reasoning and holdings remain sealed in the available portion of the opinion.
The litigation reflects the complex insurance coverage issues that often arise in corporate transactions, particularly when subsequent securities litigation challenges the adequacy of transaction disclosures. Directors and officers insurance policies typically cover defense costs and settlements in such cases, but coverage disputes frequently emerge over policy terms, exclusions, and the insurers' duty to defend.
Harman International, founded in 1953, is a leading manufacturer of audio equipment and automotive infotainment systems. The company's brands include JBL, AKG, and Harman Kardon. Samsung's acquisition of Harman in 2017 valued the company at approximately $8 billion, marking Samsung's largest acquisition at the time as it sought to expand its presence in the automotive technology sector.
The case was submitted to the Delaware Supreme Court on November 5, 2025, following briefing and oral arguments. The nearly three-month deliberation period suggests the court carefully considered the complex insurance law issues presented by the parties.
Representing the insurance companies were prominent Delaware law firms. Kurt M. Heyman, Aaron M. Nelson, and Brendan Patrick McDonnell of Heyman Enerio Gattuso & Hirzel LLP represented Illinois National Insurance Company. Robert J. Katzenstein and Julie M. O'Dell of Smith, Katzenstein & Jenkins LLP represented Federal Insurance Company.
Harman assembled a high-profile legal team led by Jennifer C. Wasson and Carla M. Jones of Potter Anderson & Corron LLP in Delaware. The company also retained national counsel including Robin L. Cohen, Orrie A. Levy, and Maria Brinkmann of Cohen Ziffer Frenchman & McKenna LLP in New York, along with Paul D. Clement, Andrew C. Lawrence, and Joseph J. DeMott of Clement & Murphy, PLLC in Alexandria, Virginia.
The involvement of Paul Clement, a former U.S. Solicitor General who frequently argues before the Supreme Court, underscores the significance of the case and the substantial stakes involved for both sides.
The Delaware Supreme Court's affirmance means the insurance carriers remain bound by whatever coverage obligations the Superior Court determined they owed to Harman. This could result in the insurers paying defense costs, settlements, or judgments related to the underlying securities litigation.
The decision adds to Delaware's extensive body of insurance law precedent, as the state's courts frequently handle complex commercial insurance disputes given Delaware's prominence as a corporate domicile. The ruling may influence how insurers and policyholders approach coverage issues in future merger and acquisition contexts.
For AIG and Chubb, the defeat represents a financial setback in what was likely a multimillion-dollar coverage dispute. Both companies are among the largest commercial insurers globally and regularly defend coverage positions in high-stakes corporate litigation.
The case originated in the Delaware Superior Court under case number N22C-05-098, indicating the litigation began in 2022, roughly five years after the underlying Samsung acquisition that triggered the coverage dispute.
While the full reasoning behind the Delaware Supreme Court's decision remains to be published, the unanimous affirmance suggests the lower court's analysis was legally sound and well-supported. The ruling provides Harman with a complete victory in the coverage litigation and establishes important precedent for similar insurance disputes arising from corporate transactions.