The D&O Diary was on assignment in London this past week, primarily to participate in an event organized in connection with the Mayor of London’s Climate Action Week conference. It was a great week in London, primarily because of the conference, but also because of the unusually pleasant weather. It was also interesting being in London for the Fourth of July holiday. Continue Reading London Climate Change Conference
In recognition of the Independence Day holiday in the U.S., and in what is now an annual tradition, I reprise my 2012 essay about Time and Summer, which can be found here. Have a great Fourth of July holiday. (Perhaps ironically, I will be spending the Fourth of July holiday in London this year.) Thank you to all of my loyal readers.
In a recent post, I expressed a variety of opinions about claims notice issues arising in connection with D&O insurance renewals. Apparently, my commentary and proposals triggered enough of a reaction from my good friend John McCarrick that he felt compelled to write a response. John is a partner at the White & Williams law firm and chair of the firm’s Financial Lines Group. John is also one of the most widely respected professionals in the D&O insurance industry, and so I am pleased he took the time to write a response to my article and pleased to publish his response here. Here is John’s response. Continue Reading Guest Post: Some Additional Thoughts on Easing Late Notice Consequences under Renewal Policies
In the following guest post, Paul Ferrillo and Christophe Veltsos consider the implications of the recently announced bankruptcy of the corporate parent of a medical billing company following a high-profile date breach at the billing company. Paul is a shareholder in the Greenberg Traurig law firm’s Cybersecurity, Privacy, and Crisis Management Practice. Chris is a professor in the Department of Computer Information Science at Minnesota State University, Mankato where he regularly teaches Information Security and Information Warfare classes. I would like to than Paul and Chris for their willingness to allow me to publish their article 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 and Chris’s article. Continue Reading Guest Post: Buckle up Directors: Cybersecurity Risk and Bankruptcy Risk Are Not Mutually Exclusive
During the first six months of 2019, federal court securities class action lawsuit filings remained well above historical levels and roughly on pace with the elevated filing levels in 2018. The number of federal court securities suit filings was significantly increased by the number of federal court merger objection lawsuit filings; however, even disregarding the merger objection lawsuit filings, the number of new lawsuits remains well above historical averages. The total securities suit filings during the years first six months were even further raised by significant numbers of state court securities class action lawsuit filings, as well. Continue Reading Securities Suit Filings Remain at Heightened Pace in Year’s First Half
One of the most watched and commented on corporate and securities litigation trends over the last several years has been the rise of management liability related lawsuits arising from cybersecurity-related incidents. While there has never been the volume of cases that some commentators expected, there have been a number of cases filed. The latest of these lawsuits is the securities class action lawsuit filed this week against FedEx, in which the plaintiff shareholder alleges the company did not fully disclose the extent of the disruption at its European operation after it was hit with the NotPetya malware virus in June 2017. A number of the allegations in the new FedEx complaint are similar to those raised in prior cybersecurity-related securities suit, suggesting some of the factors that might lead to this type of cybersecurity follow-on lawsuit. A copy of the complaint, filed in the Southern District of New York on June 26, 2019, can be found here. Continue Reading FedEx Hit with Cyber Attack-Related Securities Suit
In a recent post, I detailed the latest variant in the merger objection litigation game, in which the plaintiffs’ agree to dismiss their lawsuit in exchange for the defendants’ agreement to make additional disclosures and pay the plaintiffs’ counsel a mootness fee. The absence of any court involvement in this process makes this an appealing business model for the plaintiffs’ counsel. It also makes it difficult for anyone to challenge the procedure, reducing the likelihood of unwanted judicial scrutiny.
However, Northern District of Illinois Judge Thomas M. Durkin, exercising his “inherent authority” and acting at the urging of an objecting shareholder, has “abrogated” the settlement of the litigation arising out of the acquisition of Akorn , Inc. by Frensenius Kabi AG, and ordered the plaintiffs’ lawyers to return to Akorn their $322,000 mootness fee, ruling that the additional disclosures to which the company agreed were “worthless to shareholders” and that the underlying lawsuits should have been “dismissed out of hand.” This welcome development could possibly be the first step into driving a stake in the heart of the merger objection litigation “racket.” Judge Durkin’s June 24, 2019 order can be found here. Continue Reading Is This the Beginning of the End of the Merger Objection Lawsuit Mootness Fee Racket?
As I noted in a recent post, the securities class action lawsuit pending against Toshiba raises the question of whether or not the U.S. securities laws apply to transactions in unsponsored American Depository Receipts (ADRs). The company’s petition to the U.S. Supreme Court posed the larger question of whether there are exceptions to the second-prong of the Morrison standard holding that the U.S. securities laws apply to domestic transactions in securities. A number of organizations and even governments filed amicus briefs urging the Court to take up the case. However, in a June 24, 2019, the Court denied the company’s petition, sending the case back to the lower courts and, as discussed below, leaving behind several unanswered questions. Continue Reading U.S. Supreme Court Denies Cert in Toshiba Unsponsored ADRs Securities Suit
In the following guest post, Nessim Mezrahi, cofounder and CEO of SAR, a securities class action data analytics and software company, takes a look at possible defenses to securities class action lawsuits that corporate defendants may have based on analysis of the claimed stock price declines involved. A version of this article previously appeared on Law 360. I would like to thank Nessim 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 Nessim’s article. Continue Reading Guest Post: An Analytical Approach To Defending Securities Class Claims
In a noteworthy decision that raises a number of interesting issues, District of Minnesota Judge Ann D. Montgomery, applying Minnesota law, held that a company’s excess D&O insurance policy’s prior acts exclusion precludes coverage for the entirety of claims asserted against the company, even with respect to wrongful acts alleged to have taken place after the prior acts date. This case involves a number of twists and turns, while raising some important questions. Judge Montgomery’s June 4, 2019 opinion in the case can be found here. The Wiley Rein law firm’s June 20, 2019 post about the ruling on its Executive Summary Blog can be found here. Continue Reading D&O Insurance: Prior Acts Exclusion Precludes Coverage for Post-Past Acts Date Conduct