A Dutch court has entered a significant ruling in one of the long-running efforts by Petrobras investors to recover damages following the company’s bribery scandal. The Petrobras U.S. securities class action lawsuit settled in 2018 for $3 billion. Investors who purchased their Petrobras shares outside the U.S. were not part of that settlement, and these investors have pursued claims elsewhere, including in the Netherlands, where an action filed by a Foundation acting on behalf of a group of investors is pending. In a ruling last week, the District Court of Rotterdam rejected the Foundation’s claims under Brazilian and Argentinian law. The Court also ruled on bondholders’ claims under Luxembourg and Dutch law, as discussed below. The court’s judgment is subject to appeal. Petrobras’s October 30, 2024, filing with the SEC on Form 6-K describing the court’s judgment can be found here.Continue Reading Court Rules on Petrobras Investors’ Claims in Dutch Collective Action
Kevin LaCroix
Kevin M. LaCroix is an attorney and Executive Vice President, RT ProExec, a division of RT Specialty. RT ProExec is an insurance intermediary focused exclusively on management liability issues.
Delaware SPAC-Related Direct Action Breach of Fiduciary Duty Suit Settles for $21 Million
Long-time readers know that the significant amount of SPAC activity in past years led to a surge in SPAC-related litigation. Some of this litigation has taken the form of traditional securities class action lawsuits. However, among the more noteworthy developments in the rise of SPAC-related litigation has been the emergence of a separate type of suit, the Delaware direct action breach of fiduciary class action lawsuit, sometimes referred to a MultiPlan claim in reference to the first suit of the type to be filed. As detailed below, these kinds of lawsuits have gone through a relatively swift evolution. Many of the these kinds of cases remain pending, have not yet reached the settlement stage. However, the GeneDX lawsuit, which is one of these kinds of cases, recently settled for $21 million, subject to court approval. There are a number of interesting aspects of this settlement, as discussed below. The parties settlement stipulation in the case can be found here.Continue Reading Delaware SPAC-Related Direct Action Breach of Fiduciary Duty Suit Settles for $21 Million
Court Holds Antitrust Exclusion Bars Coverage for Unjust Enrichment and Consumer Protection Claims
Many private company D&O insurance policies have a so-called antitrust exclusions that precludes coverage for claims alleging violations of the antitrust laws. However, these exclusions are written broadly and often seek to preclude a wide range of kinds of claims, beyond just claims alleging violations of the antitrust laws. A recent case from the Eastern…
Alibaba Settles Securities Suit Over Exclusivity Practices and Ant Group’s Scuttled IPO for $433.5 Million
Chinese e-commerce company Alibaba, whose American Depository Shares (ADS) trade on the NYSE, has agreed to settle a long-running securities class action lawsuit in which the company was alleged to have misrepresented its exclusivity practices and certain aspects of the planned but withdrawn IPO of its financial affiliate, Ant Group. The company has agreed to pay $433.5 million to settle the lawsuit. The settlement is subject to court approval. As discussed below, this settlement has several interesting features.Continue Reading Alibaba Settles Securities Suit Over Exclusivity Practices and Ant Group’s Scuttled IPO for $433.5 Million
Insured vs. Insured Exclusion Does Not Bar Coverage for Debtor-in-Possession’s Suit Against Former CEO
Standard D&O insurance policies typically include an exclusion precluding coverage for claims brought by one insured against another insured. This exclusion also typically has a carve-back to the exclusion preserving coverage claims brought by bankruptcy officials, such as a trustee or received. One recurring question is whether or not a claim brought against an insured person by the company acting as debtor-in-possession is precluded by the exclusion, or whether the bankruptcy carve-back preserves coverage for the claim.
In an interesting October 3, 2024, decision, a bankruptcy court judge presiding over the Chapter 11 bankruptcy of Walker County Hospital Corporation, and applying Texas law, held that a claim by the Hospital acting as debtor-in-possession against the Hospital’s former CEO fell within the bankruptcy carve-back, and therefore that the insured vs. insured exclusion did not preclude coverage. The court’s analysis of this recurring question is interesting, as discussed below. A copy of the bankruptcy court’s October 3, 2024, opinion can be found here.Continue Reading Insured vs. Insured Exclusion Does Not Bar Coverage for Debtor-in-Possession’s Suit Against Former CEO
SEC Charges Four Companies for “Downplaying” Cyber Incidents
Earlier this week, the SEC announced that it had filed settled charges against four companies for alleged misleading disclosures concerning cybersecurity incidents at the companies. The charges against the companies arose out of the SEC’s investigation of companies potentially affected by the compromise of SolarWinds’ Orion software. One of the four companies was additionally charged with disclosure controls and procedures violations. Without admitting or denying the SEC’s charges, each company agreed to the entry of a cease-and-desist order against them. The companies agreed to pay civil penalties ranging from $4 million to $990,000. The SEC’s October 22, 2024, press release about the charges against the four companies can be found here.Continue Reading SEC Charges Four Companies for “Downplaying” Cyber Incidents
SEC Charges Investment Adviser With Failing to Adhere to Stated ESG Investment Criteria
With the news broke within the last few weeks that months earlier the SEC had quietly disbanded its Climate and ESG task force, the agency took pains to emphasize that the winding up of the Task Force did not mean that the agency was no longer policing ESG-related issues. At least one recent development underscores the fact that the agency is continuing to monitor ESG concerns, particularly “greenwashing”-type concerns. Earlier this week, the agency initiated entered an agreed cease-and-desist order against investment adviser WisdomTree Asset Management, based on alleged misstatements and compliance failures relating to the firm’s execution of its ESG investment strategy. Among other things, the agency alleged that the firm’s funds invested in the investment classes it had said it would avoid.Continue Reading SEC Charges Investment Adviser With Failing to Adhere to Stated ESG Investment Criteria
Guest Post: New York Federal Court Reinforces Importance of Forum Selection for Insurance Disputes
In the following guest post, Syed S. Ahmad, Geoffrey B. Fehling and Evan J. Warshauer of Hunton Andrews Kurth LLP’s Insurance Coverage Group analyze a New York federal judge’s recent decision to grant an insured’s motion to transfer venue in a coverage matter, highlighting key considerations related to forum selection and related strategy. This article was originally published on October 4, 2024 online with Westlaw Today. Reproduced with permission from Thomson Reuters. Further duplication is prohibited.Continue Reading Guest Post: New York Federal Court Reinforces Importance of Forum Selection for Insurance Disputes
Federal Court Holds False Claim Act’s Qui Tam Provisions Unconstitutional
More than once I have had occasion to write about qui tam actions on this site, primarily in connection with the complicated insurance coverage questions the cases can present. Now, in unexpected and provocative ruling, a federal district court judge has held the False Claims Act’s qui tam provisions to be unconstitutional. While just the opinion of a single district court judge, and therefore without precedential effect outside of the federal district in which it was rendered, the ruling nonetheless is groundbreaking and potentially significant. The potential significance of this development is discussed below. A copy of Middle District of Florida Judge Katherine Kimball Mizelle’s September 30, 2024, opinion can be found here.Continue Reading Federal Court Holds False Claim Act’s Qui Tam Provisions Unconstitutional
Cannabis Company Hit With SPAC-Related Securities Suits
For the last several years, securities class action lawsuits related to SPACs and de-SPACs have been a significant factor in the overall annual number of securities suit filings. SPAC-related suits remain a significant factor in the number of filings again this year, even though it has now been several years since the peak of the SPAC frenzy. In the latest example, on October 17, 2024, a plaintiff shareholder filed a securities suit against cannabis company WM Technology alleging that both prior to and following its predecessor company’s merger with a SPAC, the company misrepresented a key customer engagement metric. The new lawsuit has some interesting features, as discussed below. A copy of the complaint can be found here.Continue Reading Cannabis Company Hit With SPAC-Related Securities Suits