Several years ago when my wife (also a lawyer) and I were in London on holiday, we took the opportunity to visit Old Bailey, London’s famous criminal courthouse. We were fortunate on the day we visited to see a portion of rather sensational murder trial. The facts surrounding the underlying crime, while lurid, were also fascinating, but the most striking thing for us about the trial day we observed was the quality of the advocacy, which was absolutely brilliant. Witnessing the spectacle was a completely enthralling experience.
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A Final Round of Readers’ Travel Pictures
As a follow-up to my year-end activities, including publishing a list of my own top ten 2019 travel pictures, I have also been publishing pictures that readers have submitted of their 2019 travels. My first installment of readers’ 2019 travel pictures can be found here, the second installment can be found here, and the third installment can be found here. In this post, I am publishing the latest round of readers’ travel pictures, including some very distinctive pictures from Central Asia.
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Guest Post: Avoiding Event Driven Litigation through Good Cybersecurity Governance
In the following guest post, Paul A. Ferrillo takes a look at the recent findings that the SEC Office of Compliance, Inspections and Examinations issue with respect to its cybersecurity examinations of registered investment advisers and broker dealers. The findings, Paul suggests, provides good guidance from a number of perspectives with regard to cybersecurity governance issues. Paul is a partner with McDermott, Will & Emery. I would like to thank Paul 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 Paul’s article.
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Guest Post: D&O Insurance Pricing Trends
As I have noted in prior posts, and as a result of a number of factors, the current marketplace for D&O insurance marketplace is disrupted, with many buyers experiencing significant price increases. In the following guest post, Jeff Hirsch, Head of Product at Scale Underwriting, takes a detailed look at current D&O insurance pricing trends. A version of this article previously was published on the Foundershield blog. I would like to thank Jeff and Foundershield for allowing me to publish this article. 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 Jeff’s article.
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EEOC Charges Filed in FY 2019 Declined to Lowest Level in Years
The number of workplace discrimination and harassment charges filed with the U.S. Equal Employment Opportunity Commission (EEOC) during Fiscal Year 2019 (which ended September 30, 2019) declined to the lowest level since at least FY 1997 (the earliest year reported on the agency’s website), according the EEOC’s recent statistical release. The number of charges overall had also declined in the 2018 fiscal year, but in 2018, the number of sexual harassment charges had increased, apparently in response to the #MeToo movement. However, in FY 2019, the number of sexual harassment charges also decreased as part of the overall decrease in the number of charges, suggesting that the impact of the #MeToo movement diminished during the most recent fiscal year. The agency’s January 24, 2020 press release about the charge statistics can be found here. The agency’s enforcement and litigation statistics can be found here.
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Directors’ Duties in Insolvency and the D&O Insurance Implications
A recent judicial ruling out of the U.K. provides an interesting perspective on directors’ duties under applicable law when a bankrupt company is in liquidation. As discussed below, the Court held that a director’s duties continue in relevant respects even if the director’s powers cease as of the date of the bankruptcy filing. The circumstances of the case provide an interesting example of a claim that arose against a former director post-liquidation. As discussed below, the circumstances also provide an illustration of why the purchase of post-liquidation run-off coverage is advisable. Though the circumstances arose under U.K. law, the situation bears enough similarities to what might arise under equivalent U.S. law that the liability and insurance lessons are instructive even in the U.S. context.
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Broad Form Statutory Claims Exclusion Does Not Preclude Coverage for Common Law Claims
Policy exclusions with the broad “based upon or arising out of” sometimes may be applied very broadly to sweep beyond the claims that the exclusion aimed to exclude. In a recent coverage dispute, a professional liability insurer sought to apply an exclusion with the broad preamble language and precluding coverage for ERISA and securities law claims in order to preclude coverage even the common law and bankruptcy law claims alleged against the insured. In a February 7, 2020 opinion (here), Eastern District of Michigan Judge Laurie J. Michelson, applying Michigan law, concluded that the exclusion’s preclusive effect did not apply to the common law claims, because the insurer failed to establish the exclusion’s required causal connection between the alleged statutory violations, on the one hand, and the common law and bankruptcy law claims, on the other hand. Judge Michelson’s opinion provides an interesting perspective on exclusions with the broad “based upon and arising out of” preamble language.
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Despite Factual Overlap, Later Claim Unrelated to Prior Demand and Suit
In numerous prior posts, I have meditated on the meaning of “relatedness” and what it takes to make two claims sufficiently similar that they should be treated as the same claim. That was the question that a Pennsylvania federal district court addressed in a recent decision in an insurance coverage dispute. As discussed below, on January 27, 2020, Eastern District of Pennsylvania Judge Timothy J. Savage, applying Pennsylvania law, concluded that, despite overlaps, a subsequent shareholder derivative suit was not sufficiently related to another shareholder’s prior demand letter and lawsuit to preclude coverage for the later claim. The court’s decision provides abundant grounds for further ruminations on the meaning of relatedness.
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Guest Post: Side A Excess D&O Insurance: Why Directors Need a Lot of It — Now!
In the following guest post, Paul Ferrillo, a partner in the McDermott, Will & Emery law firm, takes a look at Excess Side A insurance and discusses its importance as part of a well-structured D&O insurance program. I would like to thank Paul for his willingness to allow 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 Paul’s article.
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McKesson Opioid-Related Derivative Suit Settles for $175 Million
In business meetings during my recent European visit, one topic that came up is the widespread liability risks arising out of the opioid crisis. One particular question I was asked was whether, in addition to everything else, the opioid crisis presented D&O risks. I was quick to refer to the various U.S. securities class action claims that have arisen (about which refer here) and to assure my hosts that there were indeed many other opioid-related D&O claims as well. Among the other opioid-related D&O claims is the shareholder derivative action that was filed against the board of McKesson Corp. As it turns out, the McKesson derivative suit recently settled, for an agreement to pay $175 million. As discussed below, this settlement, which is subject to court approval, and which is one of the largest derivative settlements ever, is to be funded entirely by D&O insurance.
Continue Reading McKesson Opioid-Related Derivative Suit Settles for $175 Million