Delaware Bankruptcy Court and Israeli Insolvency Court Approve Global Settlement in Nuvo Chapter 11 Case

Settlement resolves D&O claims and cross-border dispute and secures $9.75 million insurance recovery.

Highlights

Delaware Bankruptcy Court and Israeli Insolvency Court approved a global settlement resolving disputes between Nuvo and an Israeli court-appointed trustee.
Settlement includes a $9.75 million payment from Nuvo's directors and officers insurers.
Approximately $5.6 million will be distributed to the U.S. CRO, with the balance allocated to the Israeli Trustee.

Hughes Hubbard achieved a favorable outcome for Nuvo Group USA Inc. and its affiliated debtors, securing court approval of a global settlement that resolves D&O claims and cross-border disputes arising from Nuvo's Chapter 11 cases.

The settlement, approved by the U.S. Bankruptcy Court for the District of Delaware, provides for a $9.75 million payment from the company's directors and officers insurers and resolves claims involving both the debtors and an Israeli court-appointed trustee.

Nuvo, a developer of remote pregnancy-monitoring technology, filed for Chapter 11 protection in 2024 after failing to secure financing following its de-SPAC transaction. During the bankruptcy, involuntary liquidation proceedings were commenced in Israel, leading to disputes between the debtors/CRO and the Israeli trustee regarding the administration of the competing proceedings.

Following mediation, the parties reached a comprehensive settlement that resolves the D&O claims and cross-border litigation and provides funding for administrative expenses and creditor claims. Approximately $5.6 million of the settlement proceeds will be distributed to the U.S. CRO, with the remainder allocated to the Israeli Trustee.

In approving the settlement, the courts cleared a path to concluding the Chapter 11 cases while avoiding costly and time-consuming litigation involving the debtors, former directors and officers, and the Israeli trustee.

Law360 reported on the settlement.

Katie Coleman, Chris Gartman and Jeff Margolin lead the Hughes Hubbard team. Shahzeb Lari and Chris Gartman attended the mediation and negotiated the settlements.