Berkshire Hathaway’s Audit Committee has determined that David Sokol’s trades in Lubrizol shares prior to Berkshire’s announced acquisition of the company “violated company policies.” It also determined that his “misleadingly incomplete disclosures” to Berkshire management “violated the duty of candor he owed the Company.” The Audit Committee reported these findings in an April 26 report
First the “Say on Pay,” Then the Lawsuit?
One of the many changes introduced by the Dodd-Frank Act was the requirement for a shareholder vote to approve executive compensation. Under the Act’s provisions, the vote is not binding on the company or its board, but is purely advisory. Nevertheless, companies whose shareholders vote against their “Say on Pay” resolutions are finding that lawsuits
Court Sets Aside Plaintiffs’ Jury Verdict in BankAtlantic Subprime Securities Suit
The jury verdict entered in favor of the plaintiffs in the BankAtlantic subprime-related securities suit has been set aside by the court in a post-trial ruling. On April 25, 2011, Southern District of Florida Judge Ursula Ungaro, in a 112-page opinion (here), granted the defendants’ motion for judgment as a matter of
D&O Insurance: “Where’s My Price Reduction?”
One of the most challenging assignments for those of us in the D&O insurance business is to try to explain to those outside the industry how D&O insurance pricing works. The explanation is difficult enough as a general matter, but it is often even more difficult to explain in connection with a specific transaction. The
Thoughts About Sokol’s Lubrizol Trades and the Berkshire Derivative Suit
Berkshire Hathaway Chairman Warren Buffett was not exaggerating when he stated at the opening of the company’s March 30, 2011 press release (here) that the release “will be unusual.” Not only did Buffett disclose the resignation of David Sokol as Chairman and CEO of several subsidiaries, but the release also revealed that Sokol
Wage and Hour Claims Exposure and EPL Insurance
Cases alleging violations of wage and hour laws have been a growing source of litigation activity in recent years. These cases present a variety of allegations, such as unpaid overtime, employee misclassification, and failure to pay minimum wage. A March 21, 2011 NERA Economic Consulting publication entitled “Recent Trends in Wage and Hour Settlements” takes a
A Closer Look at Litigation Funding and the “Loser Pays” Model
Among the reasons frequently cited for the higher incidence of litigation in the United States compared to the rest of the world is the acceptability of contingent fees for plaintiffs’ counsel and general rules that each party to a lawsuit in the U.S. bears its own costs. Many other countries have a “loser pays” model
Advisen Releases First Quarter 2011 Corporate and Securities Litigation Report
Corporate and securities litigation filing activity reached a “crescendo” in the first quarter of 2011, according to the most recent quarterly report from Advisen, the insurance information firm. The filing rate in the year’s first three months if annualized would represent a record –settling annual level of corporate and securities litigation activity. A copy of
Securities Suits Against Chinese Companies Continue to Mount
For several years, Friday has been the day when the latest bank closures are announced (about which see further below). More recently, Friday also seems to be the day when the latest securities class actions involving Chinese companies are announced. This past Friday alone, three more securities suits involving Chinese companies were announced. Signs are
PwC Releases 2010 Securities Litigation Study
A number of trends that had predominated in recent years diminished during 2010 while new trends emerged, according to PwC’s 2010 Securities Litigation Study, which can be found here. 2010 may also mark “the start of a new era” as a consequences of a new regulatory and enforcement environment take effect, which “could lead