In my preceding post, I quoted recent reassuring words from Treasury Secretary Henry Paulson about the current credit crunch. Billionaires Warren Buffett and George Soros apparently have a less sanguine view, and there is in any event substantial recent evidence to support the view that, whether or not the worst is over, the effects will
Yes, But: The Subprime Litigation Wave Rolls On
According to news reports (here), Treasury Secretary Henry Paulson has added his voice to the growing chorus declaring that the worst of the credit crisis may be past. Paulson reportedly said that “we are seeing signs of progress as capital and credit markets stabilize.” We can all hope for the sake of the
Are Options Backdating Lawsuits Settling Low?
In a very interesting May 15, 2008 paper entitled “Do Options Backdating Cases Settle for Less?” (here), NERA Economic Consulting takes a look at the options backdating-related securities class action lawsuits settlements to date, and concludes that “in the cases that have settled to date, the amounts paid to plaintiffs have been substantially
Dismissal Denied in Countrywide Financial Subprime Derivative Lawsuit
In the most in-depth review yet of a subprime-related lawsuit complaint, Judge Mariana Pfaelzer of the Federal District Court in Los Angeles, in an order dated May 14, 2008 (here), denied the defendants’ motions to dismiss the amended complaint in the consolidated derivative lawsuit filed against Countrywide Financial, as nominal defendant, and against
The CEO’s “Pay Slice”, Corporate Governance, and Corporate Performance
One of the legacies from the era of the corporate scandals is the lasting image of certain corporate leaders as “imperial CEOs” (refer here) – that is, as greedy, power hungry overlords who exploited their companies to their own enrichment and to the shareholders’ detriment. Excessive CEO pay remains a widely perceived marker for poor
Variations on the Subprime Lawsuit Theme
The subprime litigation wave has been rolling along for well over a year, so it might be expected that by now we have seen many of the likely litigation variations. I suspect there are hosts of new variations yet to come, but the most recent subprime-related lawsuits are substantially similar to prior lawsuits. Yet each
Anticorruption Developments and D&O Insurance Implications
The growing importance of global anticorruption enforcement efforts was underscored this past week by the revelation of a cross-border investigation involving the French industrial giant Alstom and by developments in the continuing investigation involving Siemens. Moreover, the Siemens developments highlight the increasing significance of liabilities arising from anticorruption exposures for the D&O insurance industry.
First
A “Global” Approach to Securities Settlement?
The parties in the SCOR Holding (Switzerland) AG class action securities litigation seem to have devised a “global” settlement strategy to resolve the problems arising from the cross-border distribution of would-be class members.
First, some background. The lawsuit relates to alleged misrepresentations and omissions purportedly made by SCOR Holding’s predecessor in interest, Converium. Converium was domiciled
Former Directors, Advancement Rights, and D&O Insurance
It is generally understood that under Delaware law, directors enjoy broad rights of indemnification and advancement. The Delaware statutory regime does allow corporations a great deal of flexibility in how they adapt these provisions to their own circumstances. But while these principles are generally understood, it may nevertheless come as a surprise to many that
Check the CFO’s Pay Packet, Too
Commentators have long focused on CEO compensation as a leading corporate governance concern. Indeed, the Corporate Library has even suggested (here) that CEO compensation practices that “are poorly-aligned with shareholder interests” are “a powerful indicator of potential securities litigation.” While CEO compensation unquestionably is an important issue, academic research recently published by three