In a series of decision culminating in Chancellor Bouchard’s January 2016 ruling in the Trulia case (about which refer here), Delaware’s courts have shown their hostility to disclosure-only settlements in merger objection lawsuits. These Delaware developments led some observers to speculate that we might have seen the end of the litigation trend in which nearly every M&A transaction attracted at least one merger objection lawsuit.
However, a February 2017 New York court ruling in the Gordon v. Verizon Communications, Inc. (discussed here), in which an intermediate appellate court reversed the lower court’s rejection of a disclosure-only merger objection lawsuit settlement and remanded the case for an award of plaintiffs’ fees, raised the question of whether or not there might yet be life ahead for disclosure-only settlement in merger objection lawsuits.
In a provocative March 20, 2017 post on the CLS Blue Sky Blog (here), Columbia Law School Professor John Coffee takes a look at the New York court’s Verizon decision, concluding that the decision ensures that “the nuisance suit remains alive and well in New York and should bring the worst of the plaintiff’s bar streaming back to New York.” Continue Reading Are New York Courts Keeping the World Safe for Nuisance Value Merger Objection Lawsuits?
A recent summary judgment ruling in a D&O insurance coverage lawsuit in the District of Connecticut addressed several potentially preclusive coverage issues. In her February 28, 2017 opinion (
As has been documented 
The number of securities class action settlements as well as the aggregate, average, and median securities class action settlement values all increased in 2016 compared to the prior year, according to the latest annual report from Cornerstone Research. The report, entitled “Securities Class Action Settlements: 2016 Review and Analysis can be found 
Most D&O insurance policies have conduct exclusions precluding coverage for fraudulent, criminal, or willful misconduct. However, mere allegations are insufficient to trigger this exclusion. If allegations alone were enough, then many claims that would otherwise be covered under the policy would be precluded from coverage, because many D&O claims involve allegations of fraudulent, criminal, or willful misconduct. These days, the conduct exclusions in most D&O policies require a judicial determination in order for the exclusion’s preclusive effect to be triggered. Exactly what is constitutes a sufficient judicial determination is a matter of policy wording. A recent California intermediate appellate court considered a policy that required a “final adjudication” in order for the exclusion to be triggered and determined that the exclusion did not apply to preclude coverage while the insured person’s appeal remained pending, despite the insured person’s criminal securities fraud conviction. The opinion provides an interesting insight into operation of the conduct exclusion with wording of a type found these days in many D&O insurance policies. 
A recurring question – one that I am getting now on just about a daily basis – arises from concerns about the Trump administration’s possible impact on the world of directors’ and officers’ liability. Implicit in the question is the assumption that the new administration’s policies and actions will indeed affect D&O claims. While I agree with this assumption – that the new administration’s actions will have an impact–at this point it is still far too early to tell what that impact might be. For now, I think all we can do is watch some key indicators. In this blog post, I review what I think are the key indicators, and what the indicators may tell us about what lies ahead for D&O claims. 
When private companies are on track toward a planned IPO, much of the focus and attention is on readying the company for the burdens and responsibilities it will face as a public company. Among other things, this also means a focus on the potential liability exposures for the company and its directors and offices once the company goes public. Until the company actually completes its planned offering, however, it is still a private company — albeit one with a heightened set of risk exposures because of the company’s pre-IPO activities. If the planned IPO never happens, the company and its senior officials sometimes face liability claims arising from pre-IPO activities. A recent complaint filed in the Northern District of California against the former directors and officers of a pre-IPO company that ultimately went bankrupt illustrates the kind of claims pre-IPO companies and their executives can face. Pre-IPO companies’ liability exposures have important implications for the companies’ D&O insurance programs, as discussed below. 
Most management liability insurance policies are written on a defense-costs-inside-the-limits basis, meaning that covered defense costs erode the limits of liability as the expenses are incurred. Though this is a well-established arrangement within the industry for this type of insurance, the erosion of limits by defense expenses sometimes comes as an unwelcome surprise to a policyholder, usually in the middle of a serious claim. A recent federal appellate case involved an effort by a community hospital system in Mississippi to try to argue that its expenses incurred in defending an underlying claim did not erode the limits of its management liability insurance policy.
Those of us involved in the world of D&O liability insurance are well aware that the coverage issues often are technical and the relevant legal principles can change quickly as a result of evolving case law. It would be valuable for practitioners in this area to have access to a reliable resource where the key principles are described and where the key case law authority can quickly be located. Fortunately, there is such a resource. It is the “Directors & Officers Liability Deskbook” (about which refer 
