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Kevin LaCroix

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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.

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Francis Kean

On October 26, 2023, the Economic Crime and Corporate Transparency Act 2023 (the Act) became law in the UK. The Act is part of the UK government’s effort to tackle economic crime. In the following guest post, Francis Kean, Partner in the Financial Lines Team at McGill and Partners, takes a look at the SFO’s new investigative powers under the Act and considers their implications for corporate executives. A version of this article previously was published in the Governance and Compliance Magazine. I would like to thank Francis 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is Francis’s article.Continue Reading Guest Post: The Personal Liability Implications for Directors of the SFO’s New Investigatory Powers

The rise of artificial intelligence (AI) presents just about every enterprise with both opportunities and risks. AI also represents a challenge for companies and their boards as the companies seek to incorporate AI Into operations, functions, and processes. Because of AI’s potentially disruptive impact in many industries and for individual companies, many boards may find themselves under scrutiny for the way they address the risks associated with AI. All of which raises the question of the appropriate ways for boards to address and manage the AI-associated risks, a topic discussed in a July 22, 2024, Harvard Law School Forum on Corporate Governance post by attorneys from Debevoise & Plimpton law firm entitled “AI: Are Boards Paying Attention?” (here).  Continue Reading Artificial Intelligence and Corporate Boards

Lorena Kern
Katja Bullemer-Wülfert

The German Bundestag, or Federal Parliament, passed a reform of the Capital Markets Model Case Act (KapMuG) on June 13, 2024, and Germany’s Federal Council (Bundesrat) passed it on July 5, 2024. The reform is expected to take effect before the previous version expires on August 31, 2024. In the following guest post, Lorena Kern and Katja S. Bullemer-Wülfert of the DRRT law firm take a look at the reformed KapMuG and consider the possible implication of the reformed Act’s new provisions. A version of this article previously was published as a DRRT law firm client alert. I would like to thank Lorena and Katja for allowing me to publish their article on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Lorena and Katja’s article.Continue Reading Guest Post: “Class Actions” in Germany – KapMuG 2.0

As readers of this blog know, one of the vestiges of the SPAC frenzy that peaked in 2021 is a large volume of SPAC-related securities class action litigation; indeed, as I have recently noted, SPAC-related securities class action lawsuits continue to be filed. In addition to these federal court securities suits, prospective claimants with SPAC-related grievances have also filed Delaware state court breach of fiduciary duty actions, a form of litigation often referred to as “MultiPlan actions,” in reference to the MultiPlan lawsuit, which, as discussed here, was the first of these Delaware court actions to survive a motion to dismiss. Since the ruling in the MultiPlan case, plaintiffs have largely been successful in surviving dismissal motions in these kinds of cases.

However, as discussed in a June 2024 memo from the Skadden law firm (here), in May 2024, the Delaware Court of Chancery granted the motion to dismiss in the SPAC-related direct action breach of fiduciary duty suit relating to Canoo Inc., a company that was the result of a 2020 merger with a publicly traded SPAC, Hennessy Capital Acquisition Corp. IV. According to the law firm memo, the Court’s ruling was the first opinion granting a motion to dismiss in a MultiPlan claim. As discussed below, the Court’s opinion reflects a number of interesting observations about the lawsuit and claims of this type. A copy of the Court’s May 31, 2024 opinion can be found here. Continue Reading Delaware Court Grants Dismissal Motion in SPAC Transaction Proxy Disclosure Case

For many years, Delaware’s courts emphasized that duty of oversight claims (often known as Caremark claims) are “possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgment.” However, in a line of cases beginning with the Delaware Supreme Court’s 2019 decision in Marchand v. Barnhill, Delaware courts have sustained various plaintiffs’ assertion of breaches of the duty of oversight. This in turn encouraged more claimants to file duty of oversight claims, a development that clearly has alarmed the Delaware courts. The more recent result has been a series of cases in which the Delaware Chancery Court has emphatically shot down would-be duty of oversight claims.

The latest of these decisions is a ruling in a case involving the directors of Centene Corporation, in which Vice Chancellor Morgan Zurn granted the defendants’ motion to dismiss the plaintiff’s breach of the duty of oversight claims against the Centene board, in an opinion that emphasizes the high bar for Caremark liability. A copy of the July 12, 2024, opinion in Bricklayers Pension Fund of Western Pennsylvania v. Brinkley can be found here. A July 15, 2024, Memo from the Fried Frank law firm about the court’s ruling can be found here.  Continue Reading Del. Chancery Court Rejects Oversight Breach Claims Against Centene’s Board

When SEC Chair Gary Gensler expressed concerns last December about the possibility of reporting companies engaging in “AI-washing,” he was referring company disclosures that overstate or mislead investors as to their true AI capabilities or the extent to which the company has incorporated AI into their operations or products. Since the time of those remarks, there have in fact been several AI-washing based SEC enforcement actions (as discussed, for example, here), and even several securities class action lawsuits based on AI washing allegations (for example, here). Late last week, In the latest example of an AI- washing-based securities class action lawsuit, a plaintiff shareholder filed a securities class action lawsuit against Israeli-based cosmetics internet platform Oddity Tech Ltd., based on allegations that the company overstated the extent to which AI processes and tools enhanced its delivery of consumer services. A copy of the July 19, 2024, complaint can be found here.Continue Reading Cosmetics Platform Hit with AI-Washing-Related Securities Suit

Readers may have seen the news this past week that WTW has filed an appeal to the Fourth Circuit of the district court’s holding that the bump-up exclusion in its D&O insurance policy precludes coverage for the settlement of the post-closing lawsuit filed  the company’s merger with Towers Watson. This appeal is in fact the second time this coverage lawsuit has made its way to the Fourth Circuit. This appeal will be closely watched not only because of the parties involved, but also because, as discussed in a recent memo from the Cooley law firm, issues surrounding the bump-up exclusion increasingly have been the source of litigated coverage disputes, and indeed questions concerning the exclusion are increasingly common. For reasons discussed below, I think there are important issues about this exclusion that the D&O insurance industry should be discussing.Continue Reading The Bump-Up Exclusion and Coverage for Post-Close M&A Lawsuits

The pandemic officially ended well over a year ago, but the pandemic’s effects continue to ripple through the economy and affect company’s operations and financial results. Moreover, these effects continue to translate into securities class action litigation. The latest example is the lawsuit filed earlier this week against the Canadian defense software company CAE, Inc., which was sued after the disruptive effects of the pandemic caused certain of its fixed-price long-term contracts to be more costly and less profitable, notwithstanding the company’s assurances that it was managing the “ongoing challenges posed by the pandemic.” A copy of the July 16, 2024, complaint in the lawsuit can be found here.Continue Reading Defense Firm Hit with COVID and Supply Chain Disruption-Related Securities Suit

Nessim Mezrahi

In the following guest post, Nessim Mezrahi reviews the ways in which the current surging stock market affects the potential exposures of publicly traded companies and the implications for the D&O insurance industry. Nessim is co-founder and CEO of the data analytics firm SAR LLC. SAR previously published a version of this article as a client alert. I would like to thank Nessim for allowing me to publish this article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to the site’s readers. Please contact me directly if you would like to submit a guest post. Here is Nessim’s article.Continue Reading Guest Post: Securities Litigation Exposure Increases During Bull Stock Market  

Daniel Aronowitz

On June 28, 2024, the U.S. Supreme Court issued its decision in Loper Bright Enterprises v. Raimondo, in which the court overruled the so-called Chevron doctrine, pursuant to which courts had deferred to agency interpretations of ambiguous statutes. In the following guest post, Daniel Aronowitz, President of Encore [formerly Euclid] Fiduciary, provides his views of the Court’s decision in the Loper Bright Enterprises case and discusses its implications. A version of this article previously was published on Encore Fiduciary’s Fid Guru blog. I would like to thank Dan 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is Dan’s article.Continue Reading Guest Post: The Overreaction to the End of Chevron Deference