Archives: Director and Officer Liability

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Recent Delaware Caremark Duty Decision Underscores Board Cyber and Privacy Liability Risks

Under the Delaware Chancery Court decision in the Caremark case, directors can be liable for failures in their oversight duties – that is, their duties to monitor the company and its functions. Lawsuits alleging a violation of the duty of oversight are notoriously challenging for plaintiffs. However, in the recent Marchand v. Barnhill case, the … Continue Reading

Board Observers Not Subject to Section 11 Director Liability

The directors of companies have roles, responsibilities and potential liabilities. But who can be held liable as a director? That was the question that the Third Circuit recently answered in an interesting ruling in which the appellate court determined that board observers could not be held liable as directors or director equivalents under Section 11 … Continue Reading

Tribune Execs Must Contribute Personal Assets to $200 Million Settlement

Billionaire Sam Zell and other former executives of the bankrupt Tribune Company have reached a $200 million deal to settle the bankruptcy trustee’s adversarial claims against them arising out of the disastrous 2007 leveraged buyout (LBO) of the company. According to press reports about the settlement, the $200 million settlement amount will “significantly” exceed the … Continue Reading

Senator Warren’s Proposed Executive Liability Legislation is Contrary to Legal Traditions

One of the now-standard storylines about the global financial crisis is that despite all the chaos very few corporate executives were prosecuted and even fewer went to jail. However, rather than interpreting these circumstances to suggest that there was insufficient evidence to convict corporate executives beyond a reasonable doubt, some observers have decided that the … Continue Reading

Personal Liability for Corporate California Wage and Hour Violations?

Back in 2015, the California Legislature enacted Labor Law Section 558.1, making an “other person” acting for an employer (defined as any natural person who is owner, director, officer, or managing agent of the employer) who causes the employer to violate the state’s wage and hour laws liable as the employer for the violation. As … Continue Reading

The Top Ten D&O Stories of 2018

The world of directors’ and officers’ liability is always dynamic, but 2018 was a particularly eventful year in the D&O liability arena. The past year’s many developments have significant implications for what may lie ahead in 2019 – and possibly for years to come. I have set out below the Top Ten D&O Stories of … Continue Reading

Guest Post: The Truth about Directors’ Duties in the UK and the Business Judgment Rule

In the following guest post, Francis Kean, Executive Director FINEX Willis Towers Watson, reviews some interesting recent historical academic research on directors’ duties and the business judgment rule in the U.K.  A version of this article previously was published on the Willis Towers Watson Wire blog (here). I would like to thank Francis for allowing … Continue Reading

Further Wildfire-Related Management Liability Litigation: Harbinger of Things to Come?

The Northern California wildfire known as the Camp Fire – reportedly the deadliest and most destructive wildfire in California history – has finally been fully contained. But while the fire has been doused, the fight about the fire has only just begun. Investigators will now undertake to determine the fire’s cause. And the inevitable lawsuits … Continue Reading

Nike Board Hit with Sexual Misconduct-Related Derivative Suit

In the latest example of a D&O lawsuit following in the wake of allegations of sexual misconduct, three shareholders have filed a state court derivative lawsuit in Oregon against Nike’s Board of Directors alleging that the defendants failed in their oversight duties and allowing a toxic “boys club” culture of sexual harassment and bullying to … Continue Reading

Guest Post: The SEC/Musk/Tesla Settlement: The Dawning of a New Era of SEC Internet Enforcement

 As I detailed in a post at the time (here), on Thursday last week, the SEC filed a securities fraud enforcement action against Tesla Chairman and CEO Elon Musk in connection with his now infamous tweets, in which he said he had “secured” funding to take the company private at a substantial premium over the … Continue Reading

SEC Files Securities Fraud Suit Against Elon Musk Over Take-Private Tweets

Elon Musk’s August 7, 2018 Tweets, in which he had “secured” funding to take Tesla private at a substantial premium over the then-current share price, have already produced a storm of controversy and a series of securities class action lawsuits against him and the company. The Tesla CEO’s now-infamous Tweets have now also led to … Continue Reading

Plaintiff’s Sexual Assault Complaint Asserts Claims Against Michigan State’s Board of Trustees

Stories of alleged sexual misconduct have dominated recent headlines.  Allegations of sexual assault raised against Supreme Court Brett Kavanagh have been the lead story all week, and there has also been extensive coverage of the criminal sentencing of Bill Cosby for sexual assault. These stories arise as part of a broader series of revelations of … Continue Reading

Guest Post: Stronger UK Pensions Regulator: Risks for Directors and Officers

In the following guest post, Tristan Hall, Andrew Milne, and Emma Boulding of the CMS Cameron McKenna Nabarro Olswang LLP law firm take a look at the increased risks to directors and officers in the U.K. for non-compliance with employer pension schemes, as well as the implications of those increased risks for D&O insurance purposes. … Continue Reading

While You Were Out

September is here. Labor Day has come and gone. Time to put away the swim trunks, parasols, flip flops, bungee cords, ukuleles, sun screen, boomerangs, bongos, snorkels, vorpal blades, and unicycles, and get back to work. Yes, it is time to answer all those emails and return all of those phone messages. And most importantly … Continue Reading

Sexual Misconduct and D&O Claims

The fallout from the current wave of revelations sexual misconduct involving media figures, politicians, and corporate executives has included, among other things, a rash of D&O claims – including, for example, claims against the boards of 21st Century Fox and Wynn Resorts. An interesting recent scholarly paper takes a detailed look at D&O claims arising … Continue Reading

Investor Files Sexual Misconduct-Related D&O Claim Against Wynn Resorts Board

Amidst the fallout following the latest high-profile set of revelations of sexual misconduct at the highest levels of business, the media, and politics, Steve Wynn has resigned his position as Chairman and CEO of Wynn Resorts. However, as we have seen with in other instances of this type of high profile sexual misconduct, the accountability … Continue Reading
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