Priya Huskins

On January 30, 2024, Delaware Chancellor Kathaleen McCormick issued a 200-page post-trial opinion voiding the $55 billion compensation package that the Tesla board had approved for the company’s CEO, Elon Musk. In the following guest post, Priya Huskins, Esq., Senior Vice President at Woodruff Sawyer, takes a detailed look at Chancellor McCormick’s opinion and considers the opinion’s practical implications. A version of this article was previously published in the D&O Notebook. I would like to thank Priya for allowing me to publish her 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 Priya’s article.

Continue Reading Guest Post: Lessons from the Rescission of Elon Musk’s $55.8B Option Grant

The D&O Diary was on the road again this week, albeit this time for domestic travels only. The main event this week was a stop in Nashville to attend Arch Insurance’s Executive Assurance Division’s 2024 Offsite Meeting. At least by contrast to some of my recent international travel, this was a quick trip; because it was such a quick trip, I didn’t get a chance to see much of Nashville itself, but the trip was still a lot of fun.

Continue Reading Nashville

A frequently recurring insurance claims handling challenge is the problem of “too many insureds, not enough insurance.” Different insureds can have competing and even incompatible interest in the limited insurance funds. As a recent insurance coverage dispute in the Southern District of New York showed, these problems are magnified when the competing insureds also have conflicting interests in the underlying claim. Judge Jennifer Rochon’s February 8, 2024, opinion rejecting one insured’s attempt to block the competing demands to the insurance proceeds of another insured can be found here. Paul Curley’s February 11, 2024 LinkedIn post about the decision can be found here.

Continue Reading One Insured Can’t Block Insurance for Another Insured’s Settlement Based on Consent Clause
Dan Aronowitz

Many of you may have seen the February 5, 2024 Wall Street Journal article (here) describing the new lawsuit filed against Johnson & Johnson accusing the company of mismanaging its workers’ prescription-drug benefits. The new complaint, a copy of which can be found here, arguably represents a new direction in ERISA liability litigation, perhaps the next big thing after all of the ERISA excess fee litigation. In the following guest post, Dan Aronowitz, President of Encore [formerly Euclid] Fiduciary, examines the new lawsuit and assesses what it may represent. He also considers the company’s defenses as well as the need for a vigorous response to lawsuits of this kind. A version of this article previously was published on the Fid Guru Blog. I would like to thank Dan for allowing me to publish his 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 Dan’s article.

Continue Reading Guest Post: Flipping the Script on the New Excess Health Plan Fee Case Against Johnson & Johnson
Tower of London

The D&O Diary’s European Sojourn finished up last week with a return visit to London. I returned to London in order to attend an event postponed from the week before. Although the postponement required me to extend my travels for a few more days, it did also mean that I got a bonus day in London, as reflected in the pictures below.

Continue Reading Back in London
Palais du Luxembourg

The D&O Diary’s European assignment continued last week with a long weekend stopover in the French capital city of Paris. February is not the month usually associated with the French city’s romantic image, but the weather was not too bad and it turned out to be a fine time for a visit.

There were two primary purposes for our visit. The first was to attend the Van Gogh exhibit at the Musée d’Orsay and the second was to attend the Opera at the Théâtre des Champs-Élysées on Friday evening. Both events far exceeded expectations.

The Van Gogh exhibit was extraordinarily well done. The exhibit concentrated on the artist’s works completed in what turned out to be his final weeks, while he was living in Auvers-sur-Oise. The exhibition showed a keen appreciation of the artist’s struggles and helped highlight how his artistic work reflected his difficulties.
The Musée d’Orsay occupies a grand formal rail station building on the left bank of the Seine. The building itself is quite interesting and ornate. (If you look closely through the clock in this picture, you can see La Louvre across the river.)
The Opera at the Théâtre des Champs-Élysées on Friday evening was a great experience. We were fortunate to see a truly brilliant performance of Handel’s Opera, Rinaldo. We appreciated the show all the more because the week before we had just visited Handel’s house in London (where Handel lived when he wrote the opera).
After the Opera, we walked across the river to catch our train back to our hotel, and we were treated to a nighttime light show at the Eiffel Tower.

Our Paris tour also included visits to several lesser-know museums in the city. For example, on the recommendation of a work colleague, we visited the Musée National de la Marine, which is located in the Palais de Chaillot, across the river from the Eiffel Tower.

We really enjoyed the Maritime museum. Many of the exhibits are interactive and the displays are quite interesting. We wound up staying much longer at the museum than we had planned.
The other great thing about the Maritime Museum is that it is located just across the river from the Eiffel Tower, and we were fortunate that on the day we visited the overcast skies cleared and we were afforded great views of the Tower and of the city beyond. We wound up having a picnic lunch on the steps overlooking the tower, which was something we weren’t expecting at all in February.

We also went to several smaller art museums throughout the city. Among Paris’s many great treasures are these numerous small little jewel box museums, many of which are full of unexpected delights.

The Musée Cognacq-Jay in the Marais preserves the private collection of Théodore-Ernest Cognacq and Marie-Louise Jaÿ, the founder of La Samaritaine department store and his wife. The museum has a particularly fine collection of paintings from the eras of Louis XV and Louis XVI, as well as period furniture and decorative art.
The Musée de la Vie Romantique, which is located in the 9th arrondissement at the foot of Montmartre, preserves the former home of the Dutch-born painter, Ary Scheffer. His home was the Parisian gathering-spot for the prominent artists and writers in the 1830s, including George Sand, Frédéric Chopin, Eugène Delacroix, and many others. The Museum preserves the paintings and drawings of many visitors who came to the house. It is a really interesting little museum.
The Musée de Montmartre is located in a preserved house that served as the residence and studio for a number of artists in the late 19th and early 20th century, including Pierre-Auguste Renoir, Suzanne Valadon, her son Maurice Utrillo, and numerous others. The museum and its grounds preserve a substantial slice of older Montmartre, and the many paintings in the museum’s collection preserve a record of a certain time and place. Of all the hidden jewels we discovered on this trip, this museum might have been the one we enjoyed the most. I would highly recommend this to anyone interested in Montmartre’s artistic history.

The only bad part about visiting Paris is that eventually you have to leave — in my case, to go back to London for the event that had been postponed from the week before. But we did establish, as if there were any doubt, that even in February, Paris is still Paris.

The early morning scene at the Gare du Nord, where I caught the Eurostar train back to London.

In what is apparently the largest privacy and cybersecurity-related securities class action lawsuit settlement ever, the parties to the Alphabet Google+ user data securities suit have agreed to settle the action for $350 million. As discussed below, this massive settlement, which is subject to court approval, is significant for a number of important reasons. A copy of the parties’ February 5, 2024, Stipulation of Settlement can be found here. The plaintiffs’ February 5, 2024, motion for preliminary settlement approval can be found here.

Continue Reading Alphabet Google+ User Data Privacy-Related Securities Suit Settles for $350 Million

Three of the five largest bank failures in U.S. history took place over the course of just a few weeks last Spring. Because U.S. government officials acted forcefully at the time, this dangerous sequence did not trigger a contagion event across the banking sector generally. But while the Fed and others managed to stave off further bank failures, underlying problems persisted at certain banks – in particular, problems relating to the commercial real estate sector continued to weigh on banking institutions. As the Wall Street Journal put it in an article late last week, “Investors have wondered when the pain from the downturn in commercial property would hit banks.” As the Journal noted in the same article, the commercial property-related pain has now arrived for some banks. Several banks, including New York Community Bancorp (NYCB), suffered significant stock price drops after the banks last week announced steep increases in their loss reserves in their commercial real estate portfolios.

And now these developments have translated into securities litigation, as a plaintiff shareholder has launched a securities class action lawsuit against NYCB and certain of its executives. These developments and the filing of the lawsuit suggest while the Banking Crisis of 2023 may have been contained, continuing problems in the banking sector could be a factor in the number of securities class action lawsuit filings during the year. A copy of the February 6, 2024 complaint filed against NYCB can be found here.

Continue Reading Commercial Real Estate Woes Weigh on Bank, Lead to New Securities Suit
Sarah Eichenberger
Jonathan Rotenberg

As I noted in a post at the time, last Fall, the U.S. Supreme Court in the Macquarie Infrastructure Corporation v. Moab Partners, L.P. case agreed to take up the question of whether whether the failure to make disclosure required by Item 303 of Reg. S-K is an actionable omission under Section 10(b) and Rule 10b-5. In January, the Court heard oral argument in the case. In the following guest post, Sarah Eichenberger and Jonathan Rotenberg, Partners in the Securities Litigation practice at the Katten law firm, discuss the questions the Justices as asked the oral argument and assess the possible outcomes of the case, as well as the potential significance of the outcomes. I would like to thank Sarah and Jonathan 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah and Jonathan’s article.

Continue Reading Guest Post: Supreme Court Considers Whether Pure Omissions Can Support Section 10(b) Liability

In the following guest post, Anne Catapano, VP Financial Lines Claims, Ascot Insurance Company, Christina Errico, VP, Professional Liability Claims Manager, Ascot Insurance Company, Elan Kandel, Member, Bailey Cavalieri LLC, James Talbert, Associate, Bailey Cavalieri LLC and Tyler Hopkins, Associate, Bailey Cavalieri LLC, review the past year’s key management and professional liability insurance coverage decisions. 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.

Continue Reading Guest Post: Year in Review: 2023 Key Management and Professional Liability Insurance Coverage Decisions