Kevin Douglas
Lora Wuerdeman

In the following guest post, Kevin Douglas and Lora Wuerdeman of the Bass, Berry & Sims law firm take a look at post-pandemic reporting of non-GAAP financial measures. A version of this article previously was published on the Bass, Barry & Sims Securities Law Exchange. I would like to thank the authors for allowing me to publish their 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 the authors’ article. Continue Reading Guest Post: COVID-19 and Non-GAAP Financial Measures: A Survey and Overview of 1Q20 Disclosure Practices

Since the outset of the coronavirus outbreak, a relatively modest number of COVID-19 related securities suits have been filed. However in the past two days, two additional coronavirus-related securities suits were filed, bringing the total number of coronavirus-related securities suits to nine, so far. The two new suits were filed against Sorrento Therapeutics, a biopharma company, and Carnival Corporation, a cruise ship line. The Sorrento complaint can be found here and the Carnival Corporation complaint can be found here. Continue Reading Two Additional Coronavirus Outbreak-Related Securities Suits Filed

When the U.S. Senate recently passed legislation that would bar access to U.S. securities exchanges to any foreign company whose auditor is not subject to the same regulatory inspections as domestic U.S. companies, it was the culmination of a series of moves by regulators, market authorities, and legislators to try to “level the playing field” and subject the foreign companies to the same scrutiny U.S. companies and their auditors face. The recently passed Senate legislation, Senate Bill 945, known as the Holding Foreign Companies Accountable Act, was promoted by its co-sponsor, Republican Senator John Kennedy of Louisiana, as a bill that would “kick deceitful Chinese companies off U.S. exchanges.” As discussed below, in addition to the recent Senate bill, efforts by regulators and market authorities with respect to rights to inspect and supervise auditors of foreign companies with securities listed on U.S. exchanges, are continuing. Continue Reading Senate Acts to Enforce Audit Oversight on Foreign (Especially Chinese) Companies

On May 20, 2020, a plaintiff shareholder filed the latest securities class action lawsuit asserting claims based on COVID-19-related allegations. The lawsuit, filed against Elanco Animal Health, Inc., raises allegations concerning the company’s May 7, 2020 earning release, in which the company announced a significant revenue downturn that the company ascribed to the coronavirus outbreak. The complaint alleges that, in connection with the revenue downturn, the company announced that it had made changes in its distribution channels that had affected channel inventory levels and that in turn impacted the company’s financial results. A copy of the complaint can be found here. Continue Reading COVID 19-Related Securities Suit Filed Against Animal Supply Company

In the following guest post, Partners Gregory T. Grogan and Jeannine McSweeney, and Associate Jake Phillips of the Simpson Thacher law firm take a look at key issues employers should consider when contemplating compensation reductions for employees and non-employee directors during the COVID-19 pandemic. A version of this article was previously published as a Simpson Thacher client memorandum. I would like to thank the authors for their willingness to allow me to publish their article as a guest post on my 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 the authors’ article. Continue Reading Guest Post: COVID-19 Considerations for Employee and Director Compensation Reductions

As I have noted in prior posts (most recently here), an important concern these days for insurance industry observers and commentators is “silent cyber” — that is, the coverage for cyber-related losses under traditional property and casualty insurance policies, as opposed to purpose-built cyber insurance policies. For example, in one recent case (discussed here), a court found coverage for cyber losses under a business owner’s policy. While the possibility for finding cyber coverage under several other types of coverage is frequently discussed, one line of coverage that is not frequently considered is fiduciary liability coverage. However, a recent lawsuit, in which a corporate benefits plan participant lost funds to a cyber thief, suggests a way in which a cyber loss potentially could trigger a fiduciary liability policy. Continue Reading “Silent Cyber” and Fiduciary Liability Claims

In what is the latest variant of coronavirus-Related D&O claims, a plaintiff shareholder has filed class action lawsuit in Delaware State Court against the board of media technology Xperi with respect to the company’s planned merger with TiVo Corporation. Among other things, the plaintiff alleges that the defendant board members breached their fiduciary duties by failing to provide investors with adequate disclosures about the impact of the coronavirus outbreak on the deal and failing to reassess the deal in view of the fact that the pandemic represents a “Material Adverse Event” under the merger agreement. A copy of the plaintiff’s May 15, 2020 complaint can be found here. Alison Frankel’s May 18, 2020 post about the lawsuit on her On the Case blog can be found here. Continue Reading Shareholder Files State Court Class Action Over COVID-19 Impact on Planned Merger

In March 2018, the U.S. Supreme Court unanimously held in Cyan that state courts retain concurrent jurisdiction for liability actions under the Securities Act of 1933. As a result, defendants could face the prospect of parallel litigation in both federal and state court, with no means of consolidating the proceedings. In the following guest post, Bruce G. Vanyo, Richard H. Zelichov, Michael J. Lohnes, and Jonathan Rotenberg, all of the Katten law firm, take a look at Cyan’s impact and review some recent positive developments that address some of the concerns Cyan has led to. I would like to thank the authors for allowing me to publish their 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 the authors’ article. Continue Reading Guest Post: Section 11 Cases in State Court Post-Cyan – Is the Tide Turning?

Companies navigating the current heath crisis and dealing with its financial effects face a number of risks. Among the many risks is the possibility of business litigation. For publicly traded companies, the litigation risks include the possibility of securities class action litigation. Even in the midst of a pandemic, the steps companies can take to try to mitigate their securities class action litigation remain the same – manage disclosures, control insider trading, and handle bad news appropriately, among other things – but the coronavirus outbreak has added new dimensions to these steps. Well-advised companies will be making the appropriate adjustments, and, as discussed below, D&O insurance underwriters will be (or perhaps, should be) monitoring companies closely to see which companies are making the adjustments. Continue Reading Securities Litigation Loss Prevention in the Midst of a Pandemic

Here at The D&O Diary, we watch securities class action litigation filings closely in order to try to identify trends as they emerge. Recently, we have been watching in particular for coronavirus-related securities litigation filings, and reporting on new filings on this blog. However, it appears that despite all of our vigilance, a coronavirus-related securities class action lawsuit filed last month escaped our notice. This previously overlooked lawsuit is described below. As noted in the discussion section, this case may actually represent a significant example of at least one type of coronavirus-related securities suit that we may see more of in the months ahead. Continue Reading Add this Previously Filed Suit to the List of Coronavirus-Related Securities Lawsuits