The directors’ and officers’ liability environment is always changing, but 2023 was a particularly eventful year, with important consequences for the D&O insurance marketplace. The past year’s many developments also have significant implications for what may lie ahead in 2024 – and possibly for years to come.  I have set out below the Top Ten D&O Stories of 2023, with a focus on future implications. Please note that on Thursday, January 11, 2024 at 11:00 AM EST, my colleagues Marissa Streckfus, Chris Bertola, and I will be conducting a free, hour-long webinar in which we will discuss The Top Ten D&O Stories of 2023. Registration for the webinar can be found here. I hope you can join us for the webinar.Continue Reading The Top Ten Stories in D&O of 2023

One of the basic exposures that corporate directors and officers face is the risk of a shareholder derivative lawsuit. In the following guest post, Greg Markel, Giovanna Ferrari, and Sarah Fedner, all of the Seyfarth Shaw law firm, take a look at the basic features of shareholder derivative suits and conclude with ten basic takeaways for boards and others. 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: Derivative Litigation: Board Lessons and Takeaways

As I have noted on this site, for the last several years (going back at least to 2021, and arguably even further than that), one of the significant factors contributing to securities class action lawsuit filings has been the number of SPAC-related securities suits. In the latest sign that the trend of SPAC-related securities suit filings is continuing, on August 23, 2023, a plaintiff shareholder filed a securities suit in the Southern District of Florida against medical payments collection firm MSP Recovery and certain of its executives, as well as against the directors and officers of the SPAC into which the company merged in 2022. A copy of the plaintiff’s complaint can be found here. PLEASE ALSO SEE THE UPDATE, below. Continue Reading SPAC-Related Securities Suit Filed Against Medical Payments Recovery Firm

In numerous recent posts, I have detailed how activist investors have been trying to use the courts to advance their ESG-related agenda, whether the groups’ goals are to advance or oppose ESG initiatives. For example, earlier this week I discussed the recent Delaware case in which activist investors sought to hold the Disney board liable for the company’s actions regarding Florida’s “Don’t Say Gay” legislation. A high-profile example of litigation from the other direction, in which activists seek to hold board accountable for the company’s alleged insufficient actions on ESG issues, is the claim brought in English courts earlier this year against the Board of Shell, alleging that the company’s actions to address climate change were insufficient.

As detailed in an excellent June 1, 2023, memo from the Shearman & Sterling law firm (here), earlier this year the High Court ruled that the plaintiff in the case against the Shell board had failed to state a prima facie case. Just like the Disney case I discussed earlier this week, the Court’s reasoning has significant implications for those who would seek to use the courts to advance ESG-related agendas.Continue Reading English Court Rejects Climate Change Case Against Shell Board

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. 

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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

For those whose job it is to worry about the U.S. litigation risk for non-U.S. companies, the focus historically has been on the risk of U.S. securities class action litigation. However, as detailed in a new white paper from AIG and the Clyde & Co law firm, over the last 18 months a small group of U.S. plaintiffs’ law firms has filed a series of shareholder derivative lawsuits in U.S. courts on behalf of non-U.S. companies and alleging violations of the companies’ home country laws. As discussed below, these lawsuits potentially could represent a significant new source of U.S. litigation exposure and D&O liability risk for directors and officers of non-U.S. companies. A copy of the paper, which is entitled “Shareholders Increasingly Targeting D&Os of Foreign Companies in New York Derivative Actions,” can be found here.
Continue Reading Litigation Alert: U.S. Derivative Lawsuits Against Boards of Non-U.S. Companies

In one of the largest shareholder derivative lawsuit settlements ever, involving a very unusual derivative claim under Cayman Island law prosecuted in a U.S. court on behalf of a China-based Cayman Islands company, the parties to the Renren derivative litigation have agreed to settle the case for at least $300 million. The settlement is subject to a “true up” process that could increase the ultimate amount of the settlement payments. The settlement is also subject to court approval. The parties’ October 7, 2021 settlement stipulation can be found here. Renren’s October 8, 2021 press release about the settlement can be found here. An October 8, 2021 press release from the lead plaintiff’s counsel about the settlement can be found here.
Continue Reading N.Y. Derivative Suit Against China-Based Cayman Islands Company Settles for $300 Million

As I noted in prior posts (here and here), in the last few days a group of plaintiffs’ lawyers that includes former SEC Commissioner Robert Jackson and Yale Law Professor John Morley filed shareholder derivative suits against the boards of three SPACs alleging that the SPACs had improperly failed to register as investment companies under the Investment Company Act of 1940. In response, a group of 49 corporate law firms has now issued a joint statement decrying the lawsuits and trashing the plaintiffs’ arguments that SPACs are investment companies merely because the SPACs invest their IPO proceeds in trust accounts while seeking a merger partner. The corporate law firms’ joint statement sheds interesting light on the legal theories asserted in the new lawsuits. A copy of the August 27, 2021 joint statement can be found here.
Continue Reading 49 Corporate Law Firms Trash SPACs-Are-Investment-Companies Lawsuits