Long-time readers may recall that just a short time ago there was growing concern that New York’s courts might be becoming a preferred forum for aggrieved investors to pursue liability claims against non-U.S. companies’ executives, based on the companies’ home country laws. However, in early 2022, just as the alarm bells began to sound, New York courts issued a series of rulings dismissing various cases of this kind, suggesting that the furor might have been overblown. But even following these events, concern remained that New York’s courts might still prove to be available in at least certain circumstances for claims under home country law against non-U.S. companies and their executives.

A recent decision from a New York trial court, in which the court denied the defendants’ motion to dismiss a breach of fiduciary duty claim brought under Cayman law against former officers and directors of a Cayman company, confirms that, under some circumstances at least, New York courts may be an available forum for litigants to pursue these kinds of claims involving non-U.S. companies. The fact that the Court accepted the case, and the considerations that proved to be relevant to the court, are both instructive.

Continue Reading NY Court Keeps Cayman Law D&O Suit Involving a Cayman Company
Assen Koev

The resolution of many securities class action lawsuits would benefit from an economic assessment early in the case process. In the following guest post, Assen Koev argues in favor of a standardization of the initial economic assessment analysis as a way to provide the parties and concerned insurers with a clearer picture of the securities lawsuit at an earlier point in the case. Assen is an economic consultant and founder of SCA iPortal. A version of this article previously was published on Law360. I would like to thank Assen for allowing to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Assen’s article.

Continue Reading Guest Post: Standardizing Early Case Appraisal in Securities Class Actions

There is no doubt that ESG both as a concept and as a social, political, and litigation phenomenon has changed over time. Due to political backlash and changing investor priorities, ESG and ESG-related issues recently have featured less prominently in general economic and business dialog than even just a short time ago. An interesting and thought-provoking May 2, 2024, article (here) from the Rock Center for Corporate Governance asks the question whether the circumstances surrounding ESG are changing because ESG “is a luxury good”? (Hat Tip to Cydney Posner’s May 13, 2024, post on the Cooley law firm PubCo blog, here). The article raises some interesting questions and reflects interesting data and observations.

Continue Reading Is ESG a “Luxury Good”?
Brent Stevens

In the following guest post, Brent Stevens analyzes and summarizes the findings from the 2024 Claims Litigation Management Defense Counsel Study. Brent is a Senior Director at Consilio and leads Consilio’s Insurance Vertical, serving Consilio’s Insurance Industry clients, including carriers, brokers, and their law firms. I would like to thank Brent for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to the site’s readers. Please contact me directly if you would like to submit a guest post. Here is Brent’s article.

Continue Reading Guest Post: Navigating Key Insights from the 2024 CLM Study
Peter C. Fischer
Burkhard Fassbach

In the following guest post, Peter C. Fischer and Burkhard Fassbach explore the reasons why board members of German companies would be well-advised to negotiate a clause in their service agreements requiring their companies to procure D&O insurance, as well as the preferred terms and provisions that the D&O insurance should incorporate. Peter is a Professor of Law at the University of Applied Sciences Dusseldorf and Burkhard is a D&O lawyer in private practice in Germany. A version of this article in German previously was published in the law journal GWR. I would like to thank Burkhard and Peter for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.

Continue Reading Guest Post: The German D&O Procurement Clause Revisited

Here at The D&O Diary, we read everything so you don’t have to. One item that crossed my desk this week particularly resonated with me. The specific item was the court’s dismissal motion grant in the securities class action lawsuit pending against the footwear and apparel company Allbirds.

The plaintiffs had tried to argue that by their use in their complaint of bold and italicized font they had indicated which of the defendants’ statements they (the plaintiffs) alleged to be false and misleading. The court said it could not discern from the plaintiffs’ typography what statements or portions or statements were supposed to be misleading and granted the defendants’ dismissal motion with leave for the plaintiffs to attempt to replead. While the ruling could be only a setback for the plaintiffs, there arguably are some lessons here for all of us that should not be overlooked.

Continue Reading Boldface and Italics Not Enough to Identify Misleading Statements

In a recent decision in an insurance coverage dispute, the Delaware Superior Court granted the insurers’ motions to dismiss, holding that coverage under two towers of insurance was precluded, respectively, by the No Action clause and the Past Acts Exclusion. Insurance coverage practitioners and observers will find this decision interesting in and of itself, for what it says about the relevant policy provisions, and as a general matter, as an example of a Delaware court coverage decision. As discussed below, the decision arguably is an expectations-defying example of an insurer-friendly Delaware court coverage decision. A copy of the court’s May 9, 2024 decision opinion can be found here.

Continue Reading Del. Court Dismisses Coverage Suit Based on No Action, Prior Acts Clauses

As I have noted on this site in discussing artificial intelligence, among the risks and opportunities that the recent rapid emergence of AI represents for organizations of all kinds are the risks associated with AI-related regulatory oversight and supervision. Until now, references to AI-related regulatory concerns have mostly pertained to the EU’s Artificial Intelligence Act, which the European Parliament approved in March of this year. It is now clear that AI-related regulatory concerns likely will also extend to supervisory efforts of U.S. states as well, as reflected in the Colorado legislature’s May 8, 2024 passage of the Colorado Artificial Intelligence Act. This legislation, if signed into law by Colorado governor Jared Polis, would make Colorado the first U.S. state to enact comprehensive AI-related regulation.

As discussed below, the Act may or may not become law, but whether or not it does become law, it contains key signposts concerning the likely course of future AI-related regulation, as well as key AI risk management measures that well-advised companies will take to try to address their AI-related regulatory risk.

Continue Reading Colorado Legislature Passes U.S.’s First State AI Regulatory Bill
Chicago

The D&O Diary was in Chicago for a brief visit this past week. Chicago is a great place to visit anytime of the year, but the month of May might be just about the optimal time to visit. On the day of my arrival at least, the weather was just about perfect. The purpose of my visit to Chicago was to attend the 2024 Annual Meeting of the American College of Coverage Counsel.

Continue Reading Chicago

In the following guest post, James L. Griffith, Jr., of the Reger Rizzo Darnall LLP law firm, takes a look at looming retirement funding problems and the potential liability implications for ERISA fiduciaries. Jim also makes some recommendations on ways that fiduciaries can try to reduce their risk profile. I would like to thank Jim for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Jim’s article.

Continue Reading Guest Post: Protecting ERISA Fiduciaries from Wrongful Blame for the Retirement Funding Crisis