In a very interesting development and one that will definitely be worth watching, a plaintiff shareholder has launched a shareholder derivative lawsuit in New York state court on behalf of Bayer AG against members of its supervisory board, certain managers, and other defendants, seeking damages from the defendants for alleged violations of their duties under the German Stock Corporations Act. The lawsuit basically alleges that the defendants violated their duties to the company for pursuing and completing Bayer’s disastrous acquisition of Monsanto. The lawsuit raises the question of whether shareholders of a company organized under the laws of and based in Germany can pursue German law claims in New York courts using New York court procedures.  As discussed below, the plaintiff’s attempt to pursue her claims in New York rather than Germany could face significant threshold hurdles. However, if her claims are permitted to go forward, this case could have very significant implications for the potential exposures of other non-U.S. companies to litigation in the U.S.  A copy of the plaintiff’s March 6, 2020 complaint can be found here.
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Stories of alleged sexual misconduct have dominated recent headlines.  Allegations of sexual assault raised against Supreme Court Brett Kavanagh have been the lead story all week, and there has also been extensive coverage of the criminal sentencing of Bill Cosby for sexual assault. These stories arise as part of a broader series of revelations of sexual misconduct involving media figures, politicians, and corporate executives.

In the midst of this depressing litany one of the most disturbing sets of disclosures has been the revelations of the sexual misconduct involving former Michigan State University and U.S. Olympic gymnastics team physician Larry Nassar. Allegations relating to Nassar are back in the news again because of a new lawsuit a former MSU athlete has filed. The plaintiff’s allegations raise a number of issues. As discussed below, the new complaint contains extensive allegations against MSU’s Board of Trustees, underscoring how the allegations raised in the current wave of sexual misconduct allegations can lead to claims against organization’s directors and officers.
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More recent data breach-related D&O lawsuits have been filed in the form of securities class actions, one of which, the Yahoo securities class action lawsuit, recently resulted in a sizable settlement. Before that though, during the period 2014 to 2016, there was a series of data breach related suits filed in the form of shareholder derivative actions. By and large, these cases did not fare particularly well, largely resulting in dismissals. The last of these data breach-related derivative lawsuits that remained pending is the one filed against fast-food company Wendy’s. Now the Wendy’s case has also settled, albeit for a combination of cybersecurity and governance therapeutics and agreement to pay the plaintiffs’ attorneys fees. The resolution of this last remaining shareholder derivative suit again raises a question that has been much discussed, of the extent to which data breach-related issues will lead to more D&O litigation.
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Mark Sutton
Karen Boto

Among other things, the media clamor about claims of sexual misconduct involving high profile politicians and business executives has in some instances led to D&O claims, as I recently noted. In the following guest post, Mark Sutton and Karen Boto of the Clyde & Co. law firm take a look at this phenomenon, with particular attention to the specific circumstances at two prominent U.K. charities. I would like to thank Mark and Karen 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 Mark and Karen’s guest post.
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Amidst the fallout following the latest high-profile set of revelations of sexual misconduct at the highest levels of business, the media, and politics, Steve Wynn has resigned his position as Chairman and CEO of Wynn Resorts. However, as we have seen with in other instances of this type of high profile sexual misconduct, the accountability process at Wynn Resorts will not be limited to attempting to hold Wynn himself to account, but may include other senior company officials as well. According to a lawsuit filed today in Nevada state court,  officials at Wynn’s company allegedly knew for years of his sexual misconduct and failed to investigate.
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