Regular readers will recall that last year and earlier this year, plaintiffs’ lawyers filed a series of shareholder derivative lawsuits against the directors of several companies alleging that the lack of diversity on the companies’ boards breached the directors’ fiduciary duties. In the latest ruling to address preliminary motions in these various cases, the court in the board diversity lawsuit filed against directors and officers of Oracle has granted the defendants’ motion to dismiss. As discussed in greater detail below, the plaintiffs’ track record on the board diversity lawsuits is not good so far; the ruling in the Oracle suit represents the third successive dismissal granted in these suits. Continue Reading Dismissal Motion Granted in Oracle Board Diversity Lawsuit

An important recent litigation phenomenon that I have been monitoring on this site is the recent revival of the duty of oversight as a legal theory on which plaintiffs can try to assert claims against corporate boards. Delaware’s court have recently sustained several of these kinds of claims – often referred to as “Caremark” claims in reference to the 1986 Delaware Court of Chancery decision that first recognized the legal theory behind these claims – and indeed on recent federal court decision sustained a breach of the duty of oversight claim under Ohio law. In light of these developments, boards will need to anticipate the possibility that these kinds of claims can arise, which possibility in turn raises the question of what boards can do to protect themselves from these kinds of claims. Continue Reading The Duty of Oversight and the Need for Regular Board Review of Corporate Risk

Paul R. Bessette
Chris Crawford

As I have documented on this site, along with the rapid rise of SPAC-related transaction activity has come a surge in SPAC-related litigation. In the following guest post, Paul R. Bessette and Chris Crawford consider the likelihood for even further litigation relating to SPAC transactions and review the steps that well advised companies involved in SPAC transactions can take to try to reduce their litigation risks. Paul is co-chair of the King & Spalding law firm’s Corporate & Securities Litigation Practice and Chris is a Senior Vice President and Client Executive with Marsh in Los Angeles. A version of this article was previously published in Westlaw Today, 2021 WL 1990398. I would like to thank Paul and Chris for allowing 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: SPACs and SPAC-Related Litigation: A Primer on Reducing Litigation and Enforcement Risk

A cybersecurity incident earlier this year at the technology company Ubiquiti has given rise to a securities class action lawsuit against the company and two of its executives. The lawsuit is the latest example of the D&O risk exposure relating to cybersecurity. As discussed below, the lawsuit’s allegation illustrates that the way that a company handles bad news can be an important litigation risk factor. A copy of the May 19, 2021 securities lawsuit complaint against Ubiquiti can be found here. Continue Reading Internet Technology Company Hit with Data Breach-Related Securities Suit

Jeff Lubitz
Louis Angelo Panis

As readers of this blog are aware, since the outbreak of the pandemic early last year, there has been a flow of COVID-19-related securities class action lawsuits filed in U.S. courts. I have tried to track these cases as they have been filed and to note them on this site. ISS Securities Class Action Services has also been tracking these cases. In the following guest post, Jeff Lubitz and Louis Angelo Panis analyze the COVID-19 securities suits. Jeff is the Executive Director and Louis is an analyst at ISS Securities Class Action Services. The ISS SCAS data is slightly more inclusive than the data I have compiled and reported on this site, as the ISS SCAS data includes state court securities class action lawsuits as well as federal court securities class action lawsuits, whereas my data set is limited to federal court actions only. Please note that several graphic displays of the ISS SCAS litigation data follow the article. A version of this article previously was published as an ISS Insights article. I would like to thank Jeff and Louis for allowing me to publish their 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 Jeff and Louis’s article. Continue Reading Guest Post: COVID-19 Update: Investor Related Class Actions

Sarah M. Abrams, Esq.

An important corporate governance topic – but a subject that I frankly have not addressed frequently this site – is the topic of executive compensation. In the following guest post,  Sarah Abrams, Director, Management Liability Claims at Markel, examines the recent rise in D&O litigation involving executive compensation. 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 blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article. Continue Reading Guest Post: As Equity Markets Surge, Carriers Need to Examine D&O Governance Exposure

Paul Ferrillo
Gregory A. Markel

Requests for the inspection of books and records pursuant to Section 220 of the Delaware General Corporation Law is an important part of corporate litigation in Delaware. One important issue for these types of proceedings is the scope of documents that these types of requests can reach, particularly when it comes to privileged documents and other pre-discovery material. In the following guest post, Paul Ferrillo and Gregory A. Markel take a look at recent Delaware case law addressing these important issues. Paul is a partner in the securities litigation group at the Seyfarth Shaw law firm and Greg is co-head of the securities litigation group at Seyfarth Shaw. Paul and Greg would like to acknowledge the substantial contribution of Seyfarth associate Sarah A. Fedner to the completion of this article. I would like to thank Paul and Greg for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors of 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 Greg’s article. Continue Reading Guest Post: Section 220 Books and Records Demands: Can You Obtain Privileged Documents Too?

In the latest securities class action lawsuit involving a company that recently became publicly traded through a merger with a SPAC, a biodegradable plastics company and certain of its directors and officers have been hit with securities suit following media reports questioning the company’s claims about the biodegradability of its products. The company, Danimer Scientific, is one of several recently sued companies that completed a SPAC merger in December 2020. A copy of the May 14, 2021 complaint against Danimer can be found here. Continue Reading Post-SPAC Merger Securities Suit Filed Against Bio Plastics Firm

David Kaplan
Lane Arnold

One of the most important aspects of class action litigation in the U.S. is the right of individuals to “opt out” of the class. However, as discussed in the following guest post from David Kaplan and Lane Arnold, a series of recent developments has significantly complicated the decision-making framework for prospective opt outs. Kaplan is a Director at Saxena White P.A. and co-head of the firm’s Direct Action practice.  Arnold is a Senior Director – Legal at the University of Texas/Texas A&M Investment Management Company (UTIMCO).  This article was originally written and published in the April edition of The NAPPA Report.  I would like to thank Dave and Lane for allowing 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 Dave and Lane’s article. Continue Reading Guest Post: Protecting Securities Fraud Recoveries: Investors Face a Catch-22

In the latest example of a company that went public through a recent merger with a SPAC getting hit with a securities class action lawsuit, a plaintiff shareholder has filed a securities suit against plastics recycler PureCycle Technologies, certain of its executives, and the former chairman of the company’s SPAC merger partner. Like many of the recent SPAC-related securities lawsuit filings, this new lawsuit followed shortly after the publication of a highly critical short-sellers report. A copy of the plaintiff’s complaint can be found here. Continue Reading SPAC-Related Securities Suit Filed Against Plastics Recycling Company