directors and officers liability

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Angus Duncan

Global climate change has been one of the perennial hot button D&O liability issues for several years. But there is no doubt that more recently emphasis on the topic has diminished and priorities have shifted elsewhere. In the following guest post, Angus Duncan, WTW’s Global D&O Coverage Specialist (ex NA), takes a look at the possible reasons for the shift and what the long-term implications may be. A version of this article previously was published on WTW’s GB Insights website.  I would like to thank Angus for allowing me to publish his 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 Angus’s article.Continue Reading Guest Post: Climate Change and D&O Insurance

Jarett Sena

As I have noted in numerous posts on this site (most recently here), plaintiffs’ lawyers seem drawn to filing D&O claims against companies that have experience cybersecurity incidents. But as I have also noted, the plaintiffs’ lawyers’ track record in these cases is not particularly good. However, as discussed in the following guest post by Jarett Sena, Director of Litigation Analysis, ISS Securities Class Action Services, the cybersecurity-related securities class action lawsuit pending against SolarWinds recently resulted in a significant  and noteworthy settlement. This article previously was published on ISS Securities Services’ ISS Insights. I would like to thank Jarett and ISS Securities Class Action Services for allowing me to publish this 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 Jarett’s article.
Continue Reading Guest Post: SolarWinds Agrees to $26 Million Payout Over Massive Data Breach

Rachel Soich

As I have noted in prior posts on this site, cybersecurity issues can lead to D&O claims. In the following guest post, Rachel Soich, FCAS, MAAA. Consulting Actuary at Milliman, considers steps that companies can take to avoid cyber-related D&O costs. A prior version of this article previously was published in Milliman Insight. I would like to thank Rachel 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 Rachel’s article.
Continue Reading Guest Post: Three Ways to Avoid Cyber-Related D&O Costs

As part of a continuing series of recordings, I have been participating in sessions the Professional Liability Underwriting Society (PLUS) has organized discussing the potential D&O liability and insurance issues arising out of the coronavirus outbreak and the related economic disruption. In each session in the series I have been joined by my good friends…

As I have noted in numerous post on this blog (most recently here), among the many different types of fallout from the current coronavirus outbreak are the potentially significant implications for corporate liability and for D&O insurance. In the following guest post, Lawrence J. Bracken, Geoffrey B. Fehling and Lorelie S. Masters of the Hunton Andrews Kurth LLP law firm consider these implications, including the types of claims that may arise and the impact the pandemic may have D&O insurance policyholders and their insurers. I would like to thank the authors for allowing me to publish their 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 publish a guest post. Here is the authors’ article.
Continue Reading Guest Post: D&O Insurance Issues Arising from the COVID-19 Crisis

The risk of extreme weather events resulting from climate change and the collective global failure to address climate change represent the most significant current global risks, according to the World Economic Forum’s annual survey of global risks. These kinds of risks represent significant concerns for human safety, social and business disruption, and property loss. As discussed below, and as recent claims have shown, these risks may present management liability concerns as well. The World Economic Forum’s January 15, 2019 Global Risks Report can be found here.
Continue Reading Thinking About the World Economic Forum’s Global Risks Report

Alleged deficiencies in climate change-related disclosures have been a target of advocacy groups, shareholders, and regulators. The latest example of this phenomenon is the civil lawsuit the New York Attorney General filed on Wednesday against Exxon Mobil Corporation. The NYAG alleges that the company sought to “systematically and repeatedly deceive investors” about the future impacts climate change regulation could have on the company’s assets and value. The lawsuit underscores the fact that climate change disclosures are and will remain under scrutiny and that the claims alleging insufficient or deceptive climate change-related disclosures remain a significant area of corporate liability exposure. The October 24, 2018 complaint can be found here. The NYAG’s October 24, 2018 press release about the lawsuit can be found here.
Continue Reading NYAG Files Climate Change Disclosure Lawsuit Against Exxon Mobil

Paul Lockwood

Arthur Bookout

Among the most crucial issues in the world of directors and officers liability are the related questions of indemnification and advancement. Since so many companies are incorporated in Delaware, the laws of indemnification and advancement in Delaware are particularly important with respect to scope of protection available for directors and officers. In the following guest post, Paul Lockwood and Art Bookout of the Skadden, Arps, Slate, Meagher & Flom law firm take a look at these issues, with a particular focus on limitations under Delaware law on indemnification and advancement rights. A version of this paper previously was published as an AIG White Paper. I would like to thank the authors and AIG for allowing me to publish this article as a guest post. 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 Paul and Art’s article.
Continue Reading Limits on Indemnification and Advancement for Delaware Corporations

The news headlines have been dominated in recent days by appalling revelations that leading politicians, entertainers, political candidates and others have engaged in sexual harassment, assault, and even worse behavior. As these stories have emerged, a dynamic has evolved in which the victims come forward with their stories and seek to hold the wrongdoers accountable for their misconduct. Now, a blockbuster settlement entered on Monday suggests that this dynamic may not be limited just to attempting to hold individuals to account but may also involve efforts to hold the wrongdoers’ companies’ executives accountable for allowing the misconduct or for turning a blind eye.

In what is one of the largest shareholder derivative settlements ever, senior officials of 21st Century Fox have agreed to a $90 million settlement (to be funded by insurance) of allegations the company’s management permitted a culture of sexual and racial harassment to permeate the company, ultimately resulting in financial and reputational harm to the company. The settlement includes provisions for interesting governance and compliance enhancements, including the creation of a Workplace Professionalism and Inclusion Council. As discussed below, the procedural circumstances of the settlement are interesting as well, as the settlement arises out of a lawsuit that had been threatened but not filed until the same day as the settlement agreement was submitted to the court.
Continue Reading Massive Derivative Suit Settlement for Alleged Management Failure to Prevent Sexual Misconduct

deliveryagentWhen private companies are on track toward a planned IPO, much of the focus and attention is on readying the company for the burdens and responsibilities it will face as a public company. Among other things, this also means a focus on the potential liability exposures for the company and its directors and offices once the company goes public. Until the company actually completes its planned offering, however, it is still a private company — albeit one with a heightened set of risk exposures because of the company’s pre-IPO activities. If the planned IPO never happens, the company and its senior officials sometimes face liability claims arising from pre-IPO activities. A recent complaint filed in the Northern District of California against the former directors and officers of a pre-IPO company that ultimately went bankrupt illustrates the kind of claims pre-IPO companies and their executives can face. Pre-IPO companies’ liability exposures have important implications for the companies’ D&O insurance programs, as discussed below.
Continue Reading The Liability Exposures of Directors and Officers of Pre-IPO Companies