COVID-19

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On May 20, 2020, a plaintiff shareholder filed the latest securities class action lawsuit asserting claims based on COVID-19-related allegations. The lawsuit, filed against Elanco Animal Health, Inc., raises allegations concerning the company’s May 7, 2020 earning release, in which the company announced a significant revenue downturn that the company ascribed to the coronavirus outbreak. The complaint alleges that, in connection with the revenue downturn, the company announced that it had made changes in its distribution channels that had affected channel inventory levels and that in turn impacted the company’s financial results. A copy of the complaint can be found here.
Continue Reading COVID 19-Related Securities Suit Filed Against Animal Supply Company

In the following guest post, Partners Gregory T. Grogan and Jeannine McSweeney, and Associate Jake Phillips of the Simpson Thacher law firm take a look at key issues employers should consider when contemplating compensation reductions for employees and non-employee directors during the COVID-19 pandemic. A version of this article was previously published as a Simpson Thacher client memorandum. I would like to thank the authors for their willingness to allow me to publish their article as a guest post on my 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: COVID-19 Considerations for Employee and Director Compensation Reductions

In what is the latest variant of coronavirus-Related D&O claims, a plaintiff shareholder has filed class action lawsuit in Delaware State Court against the board of media technology Xperi with respect to the company’s planned merger with TiVo Corporation. Among other things, the plaintiff alleges that the defendant board members breached their fiduciary duties by failing to provide investors with adequate disclosures about the impact of the coronavirus outbreak on the deal and failing to reassess the deal in view of the fact that the pandemic represents a “Material Adverse Event” under the merger agreement. A copy of the plaintiff’s May 15, 2020 complaint can be found here. Alison Frankel’s May 18, 2020 post about the lawsuit on her On the Case blog can be found here.
Continue Reading Shareholder Files State Court Class Action Over COVID-19 Impact on Planned Merger

Here at The D&O Diary, we watch securities class action litigation filings closely in order to try to identify trends as they emerge. Recently, we have been watching in particular for coronavirus-related securities litigation filings, and reporting on new filings on this blog. However, it appears that despite all of our vigilance, a coronavirus-related securities class action lawsuit filed last month escaped our notice. This previously overlooked lawsuit is described below. As noted in the discussion section, this case may actually represent a significant example of at least one type of coronavirus-related securities suit that we may see more of in the months ahead.
Continue Reading Add this Previously Filed Suit to the List of Coronavirus-Related Securities Lawsuits

As I have been monitoring coronavirus-related D&O claims activity in recent weeks, one area I have been watching in particular is the filing of SEC enforcement actions based on pandemic-related allegations. As I noted at the time it was filed, there has already been one coronavirus-related SEC action filed. Now, on May 14, 2020, the SEC has filed two more coronavirus-related enforcement actions, and its press release accompanying the filings the agency stated that it is “actively monitoring the markets to detect potential fraudsters” who are trying to exploit the current health emergency in order to reap gains by misleading investors. The SEC’s May 14, 2020 press release about its filing of the two actions can be found here.
Continue Reading SEC Files Two More COVID 19-Related Enforcement Actions

As part of a continuing series, I have been participating in sessions that the Professional Liability Underwriting Society (PLUS) has organized addressing the potential D&O liability and insurance issues arising out of the COVID-19 outbreak. I have been joined in these recorded sessions by my good friends Carl Metzger of the Goodwin Procter law firm…

In early March, when I first wrote about the possibility of coronavirus-related D&O claims, there were then a total of 43 confirmed cases of COVID-19 in the U.S. and six deaths. In early April, when I published my first interim update to my initial post, the number of confirmed COVID-19 cases in the U.S. had grown to 267,436 and the number of deaths was over 10,400. Now, a month later, the number of confirmed cases in the U.S. has exceeded 1.2 million and the number of deaths is over 78,000. By now it is apparent that the coronavirus-outbreak represents the most significant public health crisis in the U.S. in more than a century. The disease has also had a massive impact on the economy, both within the U.S. and globally, in ways that are only now starting to be fully appreciated.
Continue Reading Coronavirus and D&O Insurance: The Latest Interim Update

As local coronavirus pandemic-related stay-at-home orders expire or are withdrawn over the coming weeks, employees will be returning to the workplace. According to a recent blog post, a “wave of workplace class actions” could follow in connection with the return to work. In an April 26, 2020 blog post on the Workplace Class Action Blog entitled “The Coming Surge of Workplace Class Actions in the Wake of COVID-19” (here), Gerald Maatman and Jennifer Riley of the Seyfarth Shaw law firm predict a surge of workplace lawsuits “in several key areas such as discrimination and workplace bias, wage & hour, as well as on the health & safety front.”
Continue Reading Will a Wave of Workplace Lawsuits Follow the Return to Work?

In what is the fifth coronavirus outbreak-related securities class action lawsuit to date, a plaintiff shareholder has filed a securities class action lawsuit against a healthcare information software services company. The lawsuit is based on alleged misrepresentations the company allegedly made with respect to a contract the company had entered for the sale of COVID-19 test kits. The company’s share price rose on news of the agreement, but later fell following an online report raising questions about the agreement. The plaintiff’s April 29, 2020 complaint can be found here.
Continue Reading Healthcare Software Services Company Hit with COVID-19 Related Securities Suit

Francis Kean

In the following guest post, Francis Kean takes a look at the potential impact on COVID 19-related claims of standard D&O insurance policy exclusions. Francis is a Partner, Financial Lines, at McGill and Partners. A version of this article previously was published as a McGill client alert. I would like to thank Francis for allowing me to publish his article 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 Francis’s article.

Continue Reading Guest Post: Beware the Unexpected Consequences of “Standard” D&O Exclusions