As readers will recall, in August, the U.S. Chamber of Commerce Institute for Legal Reform (ILR) issued a paper entitled “Courting Confusion: Federal Securities Class Actions Don’t Belong in State Courts,” in which the ILR called for Congress to require that all ’33 Act claims must be brought in federal court and authorize the removal to federal court of ’33 Act liability actions filed in state court, as discussed here. Earlier this month, I recorded an ILR podcast with Andrew Pincus, a partner at the Mayer Brown law firm and the author of the ILR paper, in which Andy and I discuss the Cyan problem; the concerns surrounding federal court securities litigation in state courts; and possible avenues for reform. The podcast, posted on the ILR website on October 12, 2021, can be found here.

Larry Fine

As I noted in a recent post, there recently has been an increase in excessive fee litigation against plan fiduciaries. In the following guest post, Larry Fine takes a look at recent developments in excessive fee litigation, and the implications for the fiduciary liability insurance industry. Larry is the Management Liability Coverage Leader at Willis Towers Watson. I would like to thank Larry 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Larry’s article. Continue Reading Guest Post: Excessive Fees, Excessive Fiduciary Litigation: A Balanced Look

Rachel Soich

As I have noted in prior posts on this site, cybersecurity issues can lead to D&O claims. In the following guest post, Rachel Soich, FCAS, MAAA. Consulting Actuary at Milliman, considers steps that companies can take to avoid cyber-related D&O costs. A prior version of this article previously was published in Milliman Insight. I would like to thank Rachel for allowing me to publish her article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Rachel’s article. Continue Reading Guest Post: Three Ways to Avoid Cyber-Related D&O Costs

In one of the largest shareholder derivative lawsuit settlements ever, involving a very unusual derivative claim under Cayman Island law prosecuted in a U.S. court on behalf of a China-based Cayman Islands company, the parties to the Renren derivative litigation have agreed to settle the case for at least $300 million. The settlement is subject to a “true up” process that could increase the ultimate amount of the settlement payments. The settlement is also subject to court approval. The parties’ October 7, 2021 settlement stipulation can be found here. Renren’s October 8, 2021 press release about the settlement can be found here. An October 8, 2021 press release from the lead plaintiff’s counsel about the settlement can be found here. Continue Reading N.Y. Derivative Suit Against China-Based Cayman Islands Company Settles for $300 Million

For a time in the late 18th century, a group of men met weekly in a London pub for dinner and conversation. In and of itself, this may seem unremarkable. What is remarkable is that the group included among its members some of the most extraordinary individuals of the age – or indeed, of any age. The group included Samuel Johnson, James Boswell, Edmund Burke, Edward Gibbon, and Adam Smith; arguably, the greatest British critic, biographer, political philosopher, historian, and economist of all time. Others in the group included others equally famous at the time, including the painter Joshua Reynolds, the playwrights Richard Sheridan and Oliver Goldsmith, and David Garrick, the greatest actor of the century. The group called itself The Literary Club, but it came to be known simply as The Club. Harvard University Literature Professor Leo Damrosch tells the group’s fascinating story in his excellent and entertaining book, The Club: Johnson, Boswell, and the Friends Who Shaped an Age. Continue Reading Sunday Arts: The Club

Last month, when the Delaware Court of Chancery sustained the breach of the duty of oversight claim against the Boeing board, some observers suggested we could see an increase in board oversight breach lawsuits. We may yet see more breach of the duty of oversight claims, but another more recent Delaware Chancery Court decision in the Marriott data breach shareholder derivative suit suggests claimants still face an uphill battle in asserting these kinds of claims. On October 5, 2021, Delaware Vice Chancellor Lori Will granted the defendants’ motion to dismiss in the case, in part on grounds related to the plaintiff’s breach of the duty of oversight claims. As discussed below, the ruling could have particular significance with respect to the prospects for claims of breach of the duty of oversight relating to cybersecurity issues. A copy of Vice Chancellor Will’s opinion can be found here. Continue Reading Cybersecurity-Related Oversight Duty Breach Claim Against Marriott Board Dismissed

In the following guest post, Gregory A. Markel, Paul Ferrillo, Daphne Morduchowitz and Sarah A. Fedner take a look at and consider the implications of the Delaware Supreme Court’s September 23, 2021 decision in United Food and Commercial Workers Union v. Zuckerberg, et al, in which the Court articulated a new test for determining whether demand is excused as futile in shareholder derivative actions under Delaware law. Greg, Paul, and Daphne are partners and Sarah is an associate at Seyfarth Shaw LLP. I would like to thank the authors 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article. Continue Reading Guest Post: Director Liability in the Wake of the New Delaware Demand Futility Test

A federal district court, applying Virginia law, has held that the “Bump-Up” exclusion in a D&O insurance policy does not unambiguously apply to preclude coverage for the settlements of underlying actions relating to the 2016 merger of Towers Watson and Willis. The court construed the exclusion narrowly and based on a reasonable interpretation most favorable to the insured, Towers Watson, determined that the settlements  were not excluded from the definition of Loss under the Bump-Up exclusion.  A copy of the court’s October 5, 2021 opinion can be found here. Continue Reading Court Holds Bump-Up Exclusion Does Not Unambiguously Preclude Coverage

As I discussed in a post at the time (here), in August 2021 the SEC brought an cybersecurity-related disclosure enforcement action against UK educational publishing firm Pearson plc. In the following guest post, Paul Ferrillo, Daphne Morduchowitz and James Billings-Kang take a detailed look at the Pearson enforcement action and discuss the action’s implications. Paul and Daphne are partners and James is an associate at the Seyfarth Shaw law firm. I would like to thank the authors 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article. Continue Reading SEC Ramps Up Its Cyber-Security Enforcement in Pearson Matter

Hyzon Motors, a hydrogen fuel cell vehicle development company that merged with a SPAC in July 2021 and that was the subject of a recent scathing short seller report, has been hit with a securities class action lawsuit. The defendants in the lawsuit include two former officers of the SPAC with which Hyzon merged. A copy of the September 30, 2021 complaint filed against Hyzon can be found here. Continue Reading Fuel Cell Vehicle Company Hit With SPAC-Related Securities Suit Following Short Seller Report