StarStone Specialty Insurance has filed suit in federal court, aiming to avoid coverage obligations tied to a high-profile SPAC merger involving smart glass company View Inc.
In a complaint lodged August 1, 2025, in the U.S. District Court for the Northern District of California (San Jose Division), StarStone seeks a declaratory judgment that it owes no defense or indemnification to View Operating Corporation—formerly View Inc.—or its former CFO, Vidul Prakash.
The dispute centers on legal actions stemming from View’s March 8, 2021, public debut via a de-SPAC merger with CF Finance Acquisition Corp. II.
StarStone argues that its $5mn follow-form excess policy, issued to Private View, sits above $20mn in underlying coverage led by Ironshore Specialty Insurance.
Both policies include a Securities Exclusion, which StarStone claims bars coverage for any claim arising from public equity offerings, including the sale or solicitation of such securities.
The insurer points to multiple legal actions as falling squarely under this exclusion. One is an SEC enforcement action, filed July 3, 2023, targeting Prakash as the sole defendant.
The SEC alleges that Prakash concealed over $20mn in liabilities during View’s transition to a public company, misrepresenting financials in multiple filings—including its December 2020 S-4, January 2021 amended S-4, February 2021 Prospectus/Proxy, March 2021 8-K, and May 2021 10-Q.
A second case, the Mehedi class action, also pending in the same court, accuses View, its executives, and board members of issuing materially misleading statements and omitting adverse business information during the SPAC process. A preliminary settlement in that suit received court approval on July 18, 2025.
StarStone’s complaint also addresses subpoenas served on former View directors Thomas Leppert and Harold Hughes. According to the insurer, these do not constitute a “Claim” nor do they allege a “Wrongful Act” as defined by the policy, and therefore do not trigger coverage.
Between January 2023 and June 2025, StarStone issued several coverage position letters to View and Prakash, all denying claims based on the Securities Exclusion and other policy terms.
While the company received no reply to some of the letters, View and Prakash disputed the denials. In a July 21, 2025 email, they demanded reimbursement for $2.15mn in subpoena-related legal costs and another $100.5K for expenses tied to the Mehedi action.
Now in the early complaint stage, StarStone asks the court to affirm it bears no duty to defend or indemnify the parties involved. The outcome will hinge on how the court interprets the Securities Exclusion and the specifics of each legal filing.
This case underscores a critical concern for insurers: the impact of policy language on liability coverage in SPAC-related transactions. With over $25mn in potential exposure, the ruling could influence future underwriting and litigation strategy in D&O insurance.
