As readers will recall, in a September 7, 2021 opinion, Delaware Vice Chancellor Morgan T. Zurn largely denied the defendants’ motion to dismiss in the Boeing Max 737 Shareholder Derivative Litigation. Two months later, the parties in the action settled the case for $237.5 million. In the following guest post, Suzanne H. Gilbert, H. Stephen Grace Jr., and S. Lawrence Prendergast examine Vice Chancellor Zurn’s Boeing opinion and consider its implications for directors’ board responsibilities. Suzanne H. Gilbert is a member of the Board of Advisors of Grace & Co. Consultancy, Inc.; H. Stephen Grace Jr., Ph.D., is President of H.S. Grace & Company, Inc.; and S. Lawrence Prendergast is a member of the Board of Advisors of Grace & Co. Consultancy, Inc. and is Chairman of the Turrell Fund. A version of this article previously was published in the American Bar Association’s Business Law Today. 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. The authors’ article follows. Continue Reading Guest Post: Boeing and the Ongoing Evolution of Director Responsibilities

As I noted at the time, earlier this year SEC Chair Gary Gensler spoke publicly about the need for revisions to Rule 10b5-1, the regulatory provision that allows corporate executives, subject to certain requirements, to trade in their holdings of their companies’ securities. Rule 10b5-1 has long been criticized because of perceived abuses. On December 15, 2021, the SEC released proposed revisions to the Rule. Among other things, the proposed revisions strengthen the requirements to access the affirmative defenses afforded under the Rule, and also enhance disclosure requirements for companies whose executives enter into trading plans pursuant to the Rule. The proposed changes are subject to a 45-day comment period after the proposed amendments are published in the Federal Register. Continue Reading SEC Proposes Amendments to Rule 10b5-1 Trading Plan Provisions

In the latest example of the kind of SPAC-related litigation that has been such a big part of the securities class action litigation filings this year, space infrastructure company Redwire Corporation, which merged with a publicly traded SPAC in September 2021, was hit with a securities class action lawsuit after the company delayed filing its third-quarter financial results. A copy of the December 17, 2021 complaint can be found here. Continue Reading SPAC-Related Securities Suit Filed Against Space Gear Company

Editor’s Note: Today’s Sunday Arts installment excerpts a post from my very earliest days of blogging. The May 25, 2006 post (here) appeared in a separate and now defunct blog called And Furthermore that I then maintained in parallel with what was then and remains now my principal blog, The D&O Diary.


One of the more interesting stories in the financial pages these days is the news surrounding the options backdating probes. As the options backdating story has continued to unfold, some have questioned whether or not there is actually anything wrong with options backdating. For example, the law blog has a May 23, 2006 video post containing a debate between a business school prof and a CNBC reporter on the topic. Options backdating is obviously not harmless — the revelation of options backdating has already proven damaging to at least some of the companies caught up in the probe as they have had to restate their past financials to reflect their true compensation costs. But even beyond the restatement threat, there is a particular reason why the options backdating story has gained momentum in a way that stories about executives’ use of corporate aircraft or gold-plated pensions have not. Continue Reading Sunday Arts: Cheating at Cards

In early January 2022,  I will be publishing on this site my annual survey of the Top Ten Stories in D&O. On Thursday, January 13, 2022, my colleague Marissa Streckfus and I will be hosting a one-hour webinar on the topic of “The Top Ten D&O Stories of 2021.”  We will be discussing the key developments of 2021 affecting the liability exposures of corporate directors and officers — including  securities litigation trends, SPAC-related litigation, litigation arising from COVID-19, D&O claims arising from cybersecurity incidents, the rise of the duty of oversight claims, and so much more. This free session will begin at 11:00 am EST. I hope that all of my loyal readers will attend. To register for the webinar, please refer here.

Among the significant constraints in the current business and financial environment is the continuing disruption of corporate supply chains. The disruption is a side-effect of the pandemic that has been exacerbated by weather events and other developments. I have been concerned that supply-chain disruption could not only interfere with ongoing business operations but could, for companies experiencing significant setbacks, lead to D&O claims, including securities class action lawsuits. There have in fact been prior securities suits filed this year arising out of supply chain issues.


The latest securities suit to reflect this phenomenon is the securities class action lawsuit filed on December 14, 2021 against bed and mattress manufacturer Sleep Number Corporation, whose supply sources for mattress foam was disrupted by the Texas winter storms earlier this year. This latest lawsuit illustrates how supply chain issues can translate into D&O claims. As discussed below, this new lawsuit raises a number of interesting questions about possible future claims. Continue Reading Supply Chain Disruption Leads to Securities Suit Against Mattress Manufacturer

Jeffrey Lubitz

In the following guest post, Jeffrey Lubitz, Executive Director of ISS Securities Class Action Services, takes a look at securities class action settlements in 2021, including aggregate figures and the largest individual settlements during the year. Jeff also notes several important trends and developments in collective investor actions outside the U.S during 2021. A version of this article previously was published on the ISS Insights blog (here). Please note that the 2021 figures below are preliminary; the final calculations will be published in January 2022. The 2021 settlement figures include all settlements with a settlement hearing date between January 1, 2021 and December 31, 2021; some hearings currently scheduled to take place before year end potentially could be pushed into 2022, which would shift the settlement into the 2022 settlement year. I would like to thank Jeff 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 Jeff’s article. Continue Reading Guest Post: Shareholder Class Action Settlements Continue Strong Pace in 2021

A standard feature of virtually every commercial contract is a choice-of-law clause. The general perception is that these types of clauses help facilitate settlement and reduce litigation costs. There is, however, one type of contract the usually omits choice-of law-clauses – insurance policies. Throughout the insurance industry and across most lines of coverage, insurance policies lack choice of law clauses. The reasons why insurance policies omit provisions that are standard for virtually every other type of commercial contract is the subject of an interesting new paper from University of North Carolina Law Professor John F. Coyle, entitled “The Mystery of the Missing Choice-of-Law Clause.” Coyle’s paper raises a number of interesting questions, some of which may be relevant as some insurers consider the question of whether they many need to add choice of law clauses to their policies. A copy of Professor Coyle’s December 2, 2021 paper can be found here. Continue Reading Why Don’t Insurance Policies Have Choice-of-Law Clauses?

In just a few days, when the time comes to tot up the 2021 securities class action lawsuit filings and to mark out the key 2021 filing trends, one of the key stories is going to be the surge during the year in the number of SPAC-related securities suit filings. In the latest example of this 2021 filing trend, late last week a plaintiff shareholder filed a securities class action lawsuit against a post-SPAC-merger fintech company. The individuals named as defendants in the lawsuit include two former officers of the SPAC. The new lawsuit has many of the features that have characterized the SPAC-related lawsuits that have been filed this year. Continue Reading Post-SPAC-Merger Fintech Company Hit with Securities Suit

I hope all of you already know this, for just in case and for those of you who do not, registration is now open for the 2022 PLUS D&O Symposium, which will be held March 1-2, 2022, at the Marriott Marquis in New York. The event will held live this year. I have already registered and I hope many of you will also register and attend the event. It will be so great to see everyone again! To register and for other information, please refer here. Continue Reading PLUS D&O Symposium March 1-2, 2022 in New York