Ralph Waldo Emerson

Ralph Waldo Emerson is not often read these days. His image has suffered with the passage of time, and he is too often ignored as one more stuffed- shirt dead white male. Perhaps it is his earnestness, or his lofty tone, which sounds dissonant to ears accustomed to the cynical or ironic tones of our more earth-bound era. Perhaps it is his antiquated vocabulary, or his even more antiquated choice of topics. No pundits and no bloggers (well, few bloggers) are focusing on topics such as “Manners,” “Character,” or “Prudence.” Perhaps it is simply because his writings were force-fed on too many unwilling high school sophomores. But for those who take the time to go back and listen to his voice, his words remain full of surprise and wisdom. Continue Reading Sunday Arts: Emerson

Almost from the very outset of COVID-19 in early 2020, investors and others have filed pandemic-related securities suits and other claims against companies and their executives. Even though the initial outbreak is now nearly 27 months in the past, claims activity continues. In the latest development, a grand jury has returned an indictment against a  health care company’s former CEO concerning statements the CEO made in April 2020 about the company’s ability to profit from sales of COVID-19 rapid tests. The SEC filed a parallel enforcement action against the company and the CEO as well. Continue Reading DOJ, SEC Press COVID 19-Related Charges Against Health Care Company, CEO

Virginia Milstead

In the following guest post, Virginia Milstead, a partner at the Skadden, Arps, Slate, Meagher & Flom LLP law firm, reviews and considers the implications of the May 13, 2022 verdict in Crest v. Padilla, in which the Los Angeles County Superior Court held that California’s statute requiring women on corporate boards violates the state constitution’s equal protection clause. A version of this article previously was published as a Skadden client alert; this version is updated to reflect the fact that the California secretary of state has indicated that she will appeal the court’s verdict. I would like to than the author 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 the author’s article. Continue Reading Guest Post: California Trial Court Strikes Down Women on Boards Law

On May 18, 2022, the Fifth Circuit held in Jarkesy v. SEC (here), that the agency’s use its in-house Administrative Law Judges, as opposed to its filing of an enforcement action in federal court, is unconstitutional. In the following guest post, Gregory A. Markel, Vincent A. Sama, Daphne Morduchowitz, Giovanna A. Ferrari, and Matthew C. Catalano of the Seyfarth Shaw law firm review the Fifth Circuit’s opinion, and discuss its implications. 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: SEC’s In-House Adjudication Deemed Unconstitutional by Fifth Circuit

In what is one of the largest ever shareholder derivative settlements, the parties to the Cardinal Health opioid-related shareholder derivative litigation have agreed to settle the suit for $124 million. The Cardinal Health settlement, which is subject to court approval, is the latest massive settlement of opioid-related derivative litigation. It also represents another example of a massive settlement of a breach of the duty of oversight claim. The settlement is to be funded entirely by Cardinal Health’s D&O insurers. A copy of the plaintiffs’ May 25, 2022 unopposed motion for preliminary approval of the settlement can be found here. Continue Reading Cardinal Health Opioid-Related Derivative Suit Settled for $124 Million

Travis Knobbe
Sarah Abrams

According to the authors of the following article, Southern District of New York Judge Jed Rakoff’s December 2020 decision in the Nine West LBO Securities Litigation could have important implications for the structure of LBO deals and the due diligence conducted in connection with the transaction, particularly in light of the current economic conditions. The article was written by Travis A. Knobbe, Partner at Freeman Mathis & Gary, LLP and Sarah Abrams, Head of Professional Liability Claims at Bowhead Specialty Underwriters. I would like to thank Travis and Sarah 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: Lessons from Nine West: Avoiding “Reckless” Leveraged Buy-Out Risks  

A perception has emerged in certain circles that Delaware Superior Court is a favorable forum for D&O insurance policyholder and unfavorable for D&O insurers. However, in a recent decision in a D&O insurance coverage dispute by the federal court in Delaware (as opposed to the state court in Delaware) not only determined that Delaware law applied but also determined that there was no coverage under the applicable policy for the underlying claim. As discussed below, the court’s ruling in the case may suggest that Delaware’s federal court may represent an alternative to Delaware’s state courts for D&O insurers. A copy of the District of Delaware’s May 23, 2022 decision in the Cocrystal case can be found here. Continue Reading Del. Federal Court Rules in Insurer’s Favor in D&O Insurance Coverage Dispute

It arguably is not news that the SEC is monitoring disclosure and related issues concerning ESG. After all, the agency’s enforcement division formed an ESG Task Force in March 2021. And as discussed here, the Task Force recently launched its first ESG disclosure-related enforcement action. Now, in the Task Force’s latest move, the agency charged an investment advisor with securities law violations related to the advisor’s claims that its fund investments had undergone ESG quality review, even though that was not always the case. BNY Mellon Investment Adviser, Inc., the investment adviser involved, agreed to pay a $1.5 million penalty to settle the charges. As discussed below, this latest Task Force action underscores the fact that the ESG cops are on the beat, and they are actively monitoring ESG-related disclosures. That could have important implications for future SEC enforcement activity. Continue Reading Attention: The ESG Cops Are On The Beat

One of the great curses on our legal system is the merger objection litigation phenomenon, pursuant to which nearly every proposed public company merger inevitably attracts at least one shareholder lawsuit in which the claimant alleges that the proxy statement disclosures regarding the proposed merger were inadequate. These lawsuits almost uniformly are settled after the defendant company voluntarily agrees to make supplemental disclosures, for which the plaintiff seeks a “mootness fee” (for supposedly obtaining the supplemental disclosures, making their lawsuit moot). When they have the chance, courts have uniformly disdained these kinds of shakedown; one prominent jurist described this recurring procedural sequence as “no better than a racket.” Yet plaintiffs’ counsel continue to file these suits and to get away with extracting fees, because the settlements and payment of attorneys’ fees so often evade judicial scrutiny. Continue Reading Court Rejects Plaintiff’s Merger Objection Lawsuit “Mootness Fee” Petition

Regular readers of this site know that one of the continuing D&O litigation trends over the last several years has been the incidence of securities class action lawsuits and other litigation arising out of cybersecurity incidents at the defendant company. While in many instances these suits have not fared particularly well, plaintiffs’ lawyers have nevertheless continued to file the suits. In the latest suit filing of this type, on May 20, 2022, a plaintiff shareholder filed a securities suit against the cybersecurity firm Octa, Inc., relating to the decline in the company’s share price following revelations of a data breach at the firm. Although in many ways this latest suit is similar to previously filed cybersecurity-related securities suits, there are certain distinct aspect of the suit that make it noteworthy, as discussed below.  A copy of the May 20, 2022 complaint in the new lawsuit can be found here. Continue Reading Cybersecurity Firm Hit with Data Breach-Related Securities Suit