One trend I have noted on this site in recent years is the proclivity of plaintiffs’ lawyers to file securities class action lawsuits or shareholder derivative lawsuits in the wake of antitrust regulatory or enforcement actions. These kinds of lawsuits tend to cluster in specific industries as antitrust enforcement authorities concentrate on alleged anticompetitive behavior in those sectors. One industry that recently was the focus of both regulatory action and securities litigation is the poultry production industry.

 

As discussed here, beginning in 2016 companies in this industry that found themselves the subject of antitrust enforcement actions were hit with follow on securities litigation. In connection with one of those suits involving poultry producer Pilgrim’s Pride the court recently granted the defendants’ motion to dismiss. Both the lawsuit and the court’s ruling are significant given the current Presidential administration’s ramped-up antitrust enforcement approach and the possibility for resulting follow-on D&O claims. The Court’s March 8, 2022 order in the Pilgrim’s Pride case can be found here. Continue Reading Antitrust Enforcement Follow-On Securities Suit Against Pilgrim’s Pride Dismissed

As I noted in a prior post (here), Delaware’s legislature recently enacted a new legislation to permit Delaware corporations to put captive insurance in place as an alternative to traditional D&O insurance. In the following guest post, Richard Porter, Head of Financial Lines, Chubb Bermuda, Jarrod Schlesinger, Head of Public Company Management Liability, Chubb N.A. Financial Lines, and Dan Bailey, Member of Bailey Cavalieri LLC, take a look at the Delaware captive legislation and raise a number of concerns about the new law. A version of this article was previously published by Chubb on its website and can be accessed here. 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: Proceed with Caution: Concerns About Delaware’s New Captive Statute

Within the D&O marketplace, the SPAC and De-SPAC space has been difficult over the last 18 to 24 months. Pricing for D&O insurance for SPACs and De-SPACs has been extraordinarily high. In addition, the insurers are only willing to provide coverage at all with extraordinarily high self-insured retentions (SIRs). These difficult marketplace conditions have caused many buyers to consider possible insurance alternatives, such as Side-A only insurance programs. The high SIRs also raise practical questions about how the elevated retentions will be funded in the event of the claim. The possible alternative insurance structures and the questions about funding the elevated retentions in turn raise a host of complicated issues about indemnification and advancement, particularly concerning the obligations of the go-forward De-SPAC company to provide indemnification and advancement for post-merger claims against former directors and officers of the SPAC.

 

Anyone who has had to try to think about these complicated indemnification and advancement issues will want to review the recent Delaware Chancery Court decision in action brought by a former SPAC officer and director, Marlene Krauss, to try to enforce her advancement rights against the post-merger De-SPAC company, 180 Life Sciences Corp. In a detailed opinion, Vice Chancellor Will basically held that Krauss was entitled to advancement except with respect to claims brought against Krauss for conduct in her capacities other than as a director or officer of the SPAC. Although D&O insurance is not addressed in the Opinion, the Vice Chancellor’s rulings arguably have important insurance implications, for example, with respect to the availability of Side A coverage and the funding of SIRs. The Vice Chancellor’s March 7, 2022 Opinion can be found here. Continue Reading Thinking About SPACs, De-SPACs, and Indemnification and Advancement

Sarah Abrams
Steven Kane

In the following guest post, Sarah Abrams, Head of Professional Liability Claims Bowhead Specialty Underwriters, Inc., and Steven Kane, Head of Financial Institutions Underwriting, Bowhead Specialty Underwriters, Inc., take a look at insurance coverage issues that could arise in connection with the separation of a principal or partner from a private equity firm. 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 from 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: Private Equity Divorce, Carried Interest, and Insurance Response

Editor’s Note: This edition of Sunday Arts reproduces here the text of a blog post published on November 10, 2010.

 

From time to time, readers suggest blog topics to me. I am always interested in the range of topics suggested. Very late at night (or perhaps early in the morning) in the bar at the recent PLUS International Conference in San Antonio, a loyal reader whom I had only just met for the first time suggested that I write a blog post about my favorite business books. Unsurprisingly, it seemed like a good idea then. Surprisingly, it still seemed like a good idea later.

 

My notion of the books worth recommending may diverge from what the reader had in mind when he made the suggestion. I figure that no one really needs me to suggest the usual fare from the business section at the book store, like, for example, The Smartest Guys in the Room or Liar’s Poker. If those books interest you, by all means, read them.

 

The problem with the vast run of business books is that they rarely aim for anything higher. To find anything of more lasting value, you must look elsewhere. So my suggested “business” books won’t be found in the business section, and in fact may not necessarily meet anybody’s idea of what constitutes a business book. But these books have more to say about the business of life and the life of business than the more conventional fare. Here are a half- dozen essential books I suggest to anyone looking for something a little more substantial: Continue Reading Sunday Arts: The Business of Life and the Life of Business

On March 9, 2022, the SEC finally released its long-anticipated updated cybersecurity disclosure requirements. The proposed rules, inclusive of specifications both for incident reporting and for risk management and governance disclosure, were adopted by a 3-1 vote and are now subject to a public reporting period. The new rules, which the Commission’s press release says are “designed to better inform investors about a registrant’s risk management, strategy, and governance and to provide timely notification of material cybersecurity incidents,” underscore the Commission’s emphasis on cybersecurity reporting and disclosure issues.

 

The SEC’s March 9, 2022 press release about the proposed new rules can be found here. The Commission’s two-page “fact sheet” about the new rules can be found here. The Commission’s 129-page proposing release can be found here. Cydney Posner’s March 9, 2022 post on the Cooley law firm’s PubCo blog about the proposed rules can be found here. Continue Reading SEC Proposes New Rules for Cybersecurity Disclosure and Incident Reporting Rules

In its latest annual report, ISS Securities Class Action Services reports that in 2021 the Robbins Geller law firm, for the second year in a row, secured the highest dollar value in securities class action lawsuit settlements during the year and also was involved in the highest number of separate settlements. The report, which includes both U.S. and Canadian settlements, ranks the top 50 plaintiffs law firms by total dollar value recoveries and the Top Ten plaintiffs law firms ranked by number of settlements achieved. The March 4, 2022 ISS SCAS report, which is entitled “The Top 50 of 2021” and was co-authored by ISS SCAS’s Jeff Lubitz and Lloyd Flores, can be found here. Continue Reading ISS SCAS Report Ranks Top 50 Plaintiff’s Securities Law Firms by 2021 Settlement Values

In the following guest post, Ed Whitworth, the Head of Directors and Officers Liability at Inigo, and Yera Patel, Head of Casualty & Financial Lines Claims and Analytics for Inigo, summarize the results of a recent survey Inigo conducted of U.S. securities litigation defense counsel.. The original of the survey summary previously was published on Inigo’s blog, here. I would like to thank Ed, Yera, and Inigo for allowing me to publish the report summary on this site. I welcome guest post submissions from responsible authors on topics of interest to the 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: Inigo 2022 D&O Defense Survey

As readers of this blog know, the various board diversity lawsuits that the plaintiffs’ lawyers filed in late 2020 and early 2021 have uniformly fared poorly in the courts. In the latest dismissal motion ruling in one of these suits, the court in the board diversity suit filed against the directors of Cisco Systems has granted the defendants’ motion to dismiss, albeit without prejudice. The court’s ruling in the Cisco Systems board diversity suit is noteworthy because the court addressed the merits of the plaintiff’s Section 14(a) claims. A copy of the court’s March 1, 2022 dismissal order can be found here. Continue Reading Board Diversity Suit Against Cisco Systems’ Directors Dismissed

As I have noted in numerous posts on this site (most recently here), the plaintiffs’ track record in data breach-related securities class action lawsuits is mixed at best. To be sure, there have been cases in which plaintiffs’ have prevailed, but overall the plaintiffs’ track record in data breach-related securities suits has been poor. In the latest setback for plaintiffs in these kinds of cases, the Ninth Circuit has affirmed the trial court’s dismissal of the data breach-related securities suit filed against Zendesk. A copy of the Ninth Circuit’s March 2, 2022 Opinion in the Zendesk case can be found here. Continue Reading Ninth Circuit Affirms Zendesk Data Breach Securities Suit Dismissal