The coronavirus pandemic poses a host of threats and challenges for every organization. The outbreak also presents a number of serious challenges for boards of directors as well. In the following guest post, Paul Ferrillo, a partner in the McDermott, Will & Emery law firm, considers the challenges that boards are facing and the litigation threats that may arise as a result. I would like to thank Paul 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 Paul’s article. Continue Reading Guest Post: Directors Beware: More Perils from COVID-19

Sean M. Fitzpatrick

A great deal of the attention in the business pages to the coronavirus outbreak has focused on the question of insurance coverage for pandemic-related business losses. In the following guest post, Sean M. Fitzpatrick takes a look at these issues and provides his own thoughts. Sean is professor of public policy at Trinity College in Hartford, CT. This article was originally published in the CT Mirror on March 22, 2020. I would like to thank Sean 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 Sean’s article. Continue Reading Guest Post: America’s Insurance Capital to the Rescue?

John F. McCarrick

As I have noted in prior posts, among the many implications from the current coronavirus outbreak is the possibility that the pandemic might result in D&O claims. This possibility in turn has a number of D&O insurance underwriting implications. In the following guest post, John F. McCarrick, a partner in the White & Williams law firm, takes a look at these possible underwriting implications. A version of this article previously was published as a White & Williams client alert. I would like to thank John 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. Continue Reading Guest Post: Underwriting D&O Risks for Coronavirus (COVID-19)-Related Exposures

With the news about the coronavirus outbreak dominating the headlines, other important stories have faded into the background — though they definitely have not gone away. Among these important continuing stories is the U.S. trade war with China. The frontlines of this trade war are on the battlefield of economic competition, which these days includes, among other things, export and import controls and other coercive measures. As one commentator has put it, the “highest-profile example of the United States’ use of targeted coercive measures against China is its yearlong campaign against Huawei, China’s national-champion telecommunications company.” And as a recently filed lawsuit demonstrates, among the implications of the two countries’ competition – and specifically, the U.S. measures targeting Huawei – is a risk that affected companies can be exposed to government investigations and also to D&O claims. Continue Reading Semiconductor Company Hit with China Trade War-Related Securities Suit

H.M.S. Endeavour

I am sure I am not the only one who has been thinking about leadership over the last few days. Leadership, as we all know, is not tested when seas are calm and skies are blue. Leadership is tested in a time of crisis. It is in times of crisis that leadership matters most.

 

These thoughts were in the forefront of my mind as I was reading Peter Moore’s excellent book, “Endeavour: The Ship That Changed the World,” which tells the story of the ship best known as the vessel on which Captain James Cook and his crew sailed their voyage of exploration and discovery between 1768 and 1771. Continue Reading Reflections on the Meaning of Leadership

Among the numerous companies hit with #MeToo-related management liability lawsuits in the late 2017 to early 2019 time frame was the national pizza restaurant company Papa John’s International Inc. The plaintiffs in the securities class action lawsuit alleged that company founder and former CEO John Schnatter and other executives sexually harassed company employees and cultivated a hostile workplace culture while the company misleadingly touted the Company’s culture and failed to divulge the true conditions to investors. The defendants’ moved to dismiss. In a March 16, 2020 order, Southern District of New York Judge Kimba Wood granted motion to dismiss, with leave to amend. Judge Wood’s order can be found here. Continue Reading Papa John’s #MeToo-Related Securities Suit Dismissed, For Now

The Delaware Supreme Court unanimously held that corporate charter provisions requiring claims under the Securities Act of 1933 to be litigated in federal court are facially valid. These kinds of provisions were proposed after the U.S. Supreme Court’s March 2018 decision in Cyan affirming that state court’s retain concurrent jurisdiction for ’33 Act liability actions. However, in December 2018, the Delaware Chancery Court ruled that federal forum provisions are invalid and unenforceable. In its March 18, 2020 decision (here), the Delaware Supreme Court reversed the Chancery Court, holding that federal forum provisions are a valid form of “private ordering.” The ruling has important implications, which are discussed below. And as also discussed below, there is a very interesting backstory – involving key D&O insurance industry players – to this successful appeal. Continue Reading Delaware Supreme Court Holds Federal Forum Provisions Facially Valid

In a very interesting development and one that will definitely be worth watching, a plaintiff shareholder has launched a shareholder derivative lawsuit in New York state court on behalf of Bayer AG against members of its supervisory board, certain managers, and other defendants, seeking damages from the defendants for alleged violations of their duties under the German Stock Corporations Act. The lawsuit basically alleges that the defendants violated their duties to the company for pursuing and completing Bayer’s disastrous acquisition of Monsanto. The lawsuit raises the question of whether shareholders of a company organized under the laws of and based in Germany can pursue German law claims in New York courts using New York court procedures.  As discussed below, the plaintiff’s attempt to pursue her claims in New York rather than Germany could face significant threshold hurdles. However, if her claims are permitted to go forward, this case could have very significant implications for the potential exposures of other non-U.S. companies to litigation in the U.S.  A copy of the plaintiff’s March 6, 2020 complaint can be found here. Continue Reading Derivative Suit Against Bayer Board Alleging German Law Violations Filed in NY Court

In the following guest post, Dan Gold, Thad Behrens, Kit Addleman, Emily Westridge Black, Carrie L. Huff, Timothy Newman, Matt McGee, and Odean L. Volker of the Haynes and Boone, LLP law firm review the key developments during 2019 in securities litigation and enforcement, including significant securities related decisions by the Supreme Court and federal appellate courts, key developments in SEC enforcement, and significant rulings in state law fiduciary litigation against directors and officers of public companies. A version of this article previously was published as a Haynes and Boone client alert. I would like to thank the authors for their willingness to allow 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: 2019 Securities Litigation: Key Takeaways and Trends

In a post late last week I noted the filing of the first coronavirus-related securities class action lawsuit, commenting at the time that though the lawsuit was the first, it was unlikely to be the last. I did not suspect that the next coronavirus-related securities suit would come quite so quickly – in fact, it appears that the second coronavirus-related suit might actually already been filed then. On March 12, 2020, an Inovio Pharmaceuticals shareholder filed a securities class action lawsuit against the company and its CEO based upon the CEO’s statements about the company’s development of a COVID-19 vaccine. A copy of the Inovio Pharmaceuticals complaint can be found here. Continue Reading Pharma Company Hit with Securities Suit over COVID-19 Vaccine Claims