Every now and then it is worthwhile to go back to the basics. In the following guest post, Greg Markel, Gina Ferrari, and Sarah Fedner, all of the Seyfarth Shaw law firm, review the basic building blocks of corporate governance duties and discuss ways for directors and boards to avoid violating the duties. 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: Essential Corporate Governance Duties and How To Avoid Violating Them

The D&O Diary is on assignment in the Asia Pacific region this week, with a first stop in the beautiful Australian city of Sydney. Even though it was still Southern Hemisphere late winter/early spring while I was in Australia, the weather was beautiful and even summerlike. I was fortunate that my meeting schedule in Sydney allowed me a little bit of time to enjoy the weather and the sunshine, as the pictures below reflect.

Continue Reading Sydney

In the latest development in a short but very interesting sequence of events in a recently filed SPAC-related securities lawsuit, a federal district court judge in the Southern District of Florida has directed a magistrate judge to consider whether the plaintiff’s firm that filed the lawsuit must show cause that it didn’t violate and bar or local rules in allegedly soliciting the plaintiff on whose behalf the law firm filed the complaint.

Continue Reading Plaintiff Law Firm’s Client Solicitation Practices to Face Scrutiny

As the phenomenon of ESG-related litigation has developed and evolved in recent months, it has unfolded that the lawsuits are not, as was expected, being filed against ESG laggards, but instead are being filed against companies that were proactive on ESG-related issues. One of the cases illustrating this development is the securities lawsuit filed against the consumer products company Unilever, based on allegations that the company had failed to disclose a resolution passed by the independent board of its Ben and Jerry’s subsidiary to end ice cream sales in occupied Israeli territories. On August 29, 2023, In a ruling that suggests that these kinds of ESG-related cases could face challenges, Southern District of New York Judge Lorna Schofield granted the defendants’ motion to dismiss the lawsuit, on the grounds that the plaintiff had failed to sufficiently plead scienter. A copy of the August 29 opinion and order can be found here.

Continue Reading ESG-Related Suit Against Unilever Based on Ben & Jerry’s Board’s Resolution Dismissed

In my recent roundup of the top stories in the world of directors’ and officers’ liability and insurance, I noted that a host of macroeconomic factors – such as supply chain disruptions and labor supply constraints — continue to weigh on companies and, in some instances, translate into securities class action litigation. I have also noted in numerous prior posts how COVID-19 has itself resulted in securities lawsuit filings. In the latest example of a securities suit filing resulting from these various phenomena, last week a shareholder plaintiff filed a securities lawsuit against the robotic aircraft systems development and service company AeroVironment after the company delivered disappointing results due to supply chain woes resulting from COVID-19. The complaint is both representative of these types of cases and illustrative of how these kinds of concerns, even after a significant time lag, can result in a current securities lawsuit filing. A copy of the plaintiff’s August 30, 2023, complaint can be found here.

Continue Reading Robotic Aircraft Company Hit with COVID-19 and Supply Chain-Related Securities Suit

Every year after Labor Day, I take a step back to survey the most important current trends and developments in the world of Directors’ and Officers’ liability and insurance. This year’s review is set out below. As the following discussion shows, this is a particularly interesting time in the world of D&O.

Continue Reading What to Watch in the World of D&O
Sarah Abrams

In the following guest post, Sarah Abrams, Head of Professional Liability Claims at Bowhead Specialty, discusses the updated compliance rules for Private Equity Firms and Hedge Funds, which the SEC released on August 23, 2023. I would like to thank Sarah for allowing me to publish her article on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.

Continue Reading Guest Post: New SEC PE and Hedge Fund Disclosure Rules Winners? The Lawyers

One of the perennial issues involving D&O insurance coverage in the bankruptcy context is the question whether the directors and officers of the corporate debtor can tap the insurance policy to pay their defense expenses in connection with claims filed against them in their capacities as executives of the corporate entity. These issues have arisen once again in the bankruptcy proceedings of the corporate parent of Silicon Valley Bank, SVB Financial Group, where the bank’s directors and officers found themselves compelled to petition the bankruptcy court to lift the stay in bankruptcy in order for the bank’s insurers to pay the individuals’ defense expenses.

While there is nothing novel about the bankruptcy court’s order granting the stay, both the high-profile nature of the proceedings and the critical importance of the issues involved warrant taking a closer look at what unfolded in that case. A copy of the bankruptcy court’s May 22, 2023, order in the case can be found here. An August 23, 2023, memo from the Foley Hoag law firm about the court’s decision can be found here.

Continue Reading SVB Bankruptcy Court Lifts Stay to Allow Insurance to Pay Individuals’ Defense Expenses

As I have noted on this site, for the last several years (going back at least to 2021, and arguably even further than that), one of the significant factors contributing to securities class action lawsuit filings has been the number of SPAC-related securities suits. In the latest sign that the trend of SPAC-related securities suit filings is continuing, on August 23, 2023, a plaintiff shareholder filed a securities suit in the Southern District of Florida against medical payments collection firm MSP Recovery and certain of its executives, as well as against the directors and officers of the SPAC into which the company merged in 2022. A copy of the plaintiff’s complaint can be found here. PLEASE ALSO SEE THE UPDATE, below.

Continue Reading SPAC-Related Securities Suit Filed Against Medical Payments Recovery Firm