Much has changed since I published my first coronavirus-related post a month ago. The number of confirmed cases and of deaths has soared. Much of the country is now on lockdown. School, work, business — so much of basic social and economic activity has stopped. Much has changed in the D&O arena as well. There have been both claims and underwriting developments, and a number of trends have emerged. In the post below, I discuss some of these developments and trends. I recognize that my observations are limited by my own personal perspective; it is my hope that others will share their observations about the current environment using the comment feature to add their views to this post. Continue Reading Coronavirus and D&O Insurance: An Interim Update

Three weeks ago, as part of a Professional Liability Underwriting Society (PLUS) series of recorded discussions on the professional liability insurance implications of the COVID-19 Coronavirus outbreak, I participated in a short recorded conversation on the viral outbreak’s D&O insurance implications with my good friends Carl Metzger of the Goodwin Procter law firm and Rob Yellen of Willis Towers Watson. Because so much has happened since that prior session just three short weeks ago, earlier this week Carl, Rob, and I recorded an updated session in which we took a look at our prior predictions, reviewed what we are currently seeing in the D&O insurance marketplace and what we are telling our clients about it, and also projected ahead for what might be coming soon. The recording, which is informal, conversational, and relatively brief (approximately 30 minutes), can be found here.

As the number and rate of securities class action lawsuit filings has remained at historically high levels over the past three years, there have been renewed calls for securities class action litigation reform, as I have detailed in prior post (for example, here). According to a March 25, 2020 paper by the U.S. Chamber Institute of Legal Reform (ILR), the “broken securities class action system continues out of control” and the need for securities litigation reform remains urgent.  On April 1, 2020, I participated in an ILR event, along with ILR President Harold Kim and Andrew Pincus of the Mayer Brown law firm, entitled “An Update on Securities Litigation,” in which we discussed key recent securities litigation developments and the continuing case for securities litigation reform. The paper can be found here and a video recording of the ILR event can be found here. Continue Reading The Continuing Case for Securities Litigation Reform

Francis Kean

One of the questions for companies facing financial difficulties both in the U.S. and in the UK is the extent to which the boards of the companies owe duties to creditors to try to avoid creditors’ losses as the companies approach insolvency. I discussed the state of the law in Delaware regarding these issues in a recent post. In the following guest post, Francis Kean, a partner in the financial lines team at McGill and Partners, takes a look at the recent suspension in the UK of “wrongful trading’ legislation   A version of Francis’s article previously was published on LinkedIn. I would like to thank Francis for allowing me to publish his 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 of you would like to submit a guest post. Here is Francis’s article. Continue Reading Guest Post: UK’s Wrongful Trading Laws Suspended: Good News for Company Directors?  

David Topol

Private investments funds (hedge funds, PE firms, venture capital funds and the like) are a significant part of the U.S. economy. From a management liability insurance perspective, private investment funds present unique underwriting and claims issues. In the following guest post, David Topol, takes a detailed look at these kinds of enterprises, and considers the relevant claims and insurance issues. David is a partner in the insurance practice at Wiley.  He has substantial experience over the past fifteen years representing insurers as monitoring counsel and in coverage litigation on policies issued to investment advisers, private funds and broker-dealers.  A version of this article will be published in a forthcoming issue of the Wiley law firm’s Executive Summary blog. I would like to thanks David 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 David’s article. Continue Reading Guest Post: Private Investment Fund Claims from an Insurance Perspective

The current disruption to normal business operations across the country means that many businesses will soon be under significant financial pressure, if they are not there already. As their companies edge toward insolvency, directors are going to have to make significant decisions about the companies and their operations. Boards may be concerned, as they make critical and difficult decisions, that creditors or others may later attempt to claim that they violated their legal duties.  This concern in turn leads to the question about exactly what duties directors face as their companies approach insolvency. Continue Reading Cash-Crunched Companies Face Insolvency; Will Directors Face Claims?

In yet another significant #MeToo-related development, the parties to the Signet Jewelers securities class action lawsuit have agreed to settle the case for $240 million. There are a number of interesting features to the settlement, as discussed below; among other things, over $200 million of the settlement amount is to be funded by insurance. The settlement is subject to court approval. The plaintiff’s March 26, 2020 letter to the court regarding the settlement can be found here. The parties’ stipulation of settlement can be found here. Continue Reading Signet Jewelers Settles #MeToo-Related Securities Suit for $240 Million

Priya Cherian Huskins

As I have noted in prior posts (most recently here), there have already been at least two coronavirus-related securities class action lawsuits filed. In the following guest post, Priya Cherian Huskins, takes a look at these first pandemic-related cases and compares and contrasts them with general securities litigation filings patters. She also takes a look at the implications of the cases for coronavirus-related company disclosures.  Priya is a Senior Vice President and Partner at Woodruff Sawyer. A version of this article previously appeared in the D&O Notebook. I would like to thank Priya for allowing me to publish her 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 Priya’s article. Continue Reading Guest Post: Coronavirus: An Update on Securities Suits and on Updating Company Disclosures

Among the more significant securities class action filing trends in recent years has been the rise in event-driven litigation – that is, lawsuits based on adverse developments in the defendant company’s business operations, as opposed to allegations based on alleged financial or accounting misrepresentation. But while event-driven suits arguably have garnered the most attention, the reality is that the number of federal court securities class action lawsuits involving accounting allegations was at “record levels” in 2019, at least when merger-related accounting suits are taken into account. According to a new report from Cornerstone Research, the number of securities suit filings in 2019 involving accounting allegations was nearly double the historical average. The March 25, 2020 report, entitled “Accounting Class Action Filings and Settlements: 2019 Review and Analysis” can be found here. Cornerstone Research’s press release describing the report can be found here. Continue Reading Accounting-Related Securities Suit Filings at “Record Levels” in 2019

Daniel Wolf

This blog’s readers know that a claim arising from the current coronavirus-related outbreak could present a number of insurance-related issues, including, among many others, perennial issues involving timeliness of notice of claim. In the following guest post, Daniel Wolf, an associate at the Gilbert LLP law firm, take a look at notice of claim considerations businesses may want to take into account with respect to potential coronavirus-related claims  A version of this article first appeared on his firm’s blog. I would like to thank Daniel 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 Daniel’s article. Continue Reading Guest Post: For Businesses at Risk of COVID-19 Lawsuits, Consider Providing Notice of Circumstance