In a development that undoubtedly will attract comment and controversy, fourteen former Lehman Brothers executives – including former Lehman Chairman and CEO Dick Fuld (pictured) –have reached an agreement to settle the consolidated securities class action litigation that has been filed against them for $90 million. In a separate development, seventeen former Lehman executives have agreed
Lehman Brothers Credit Crisis-Related Securities Suit to Proceed
In a detailed 106-page opinion dated July 27, 2011 (here), Southern District of New York Judge Lewis Kaplan granted in part and denied in part the defendants’ motions to dismiss in the consolidated Lehman Brothers Securities Litigation. Though Judge Kaplan knocked out certain of the plaintiffs’ allegations, what Judge Kaplan called the “core&rdquo
Second Circuit Holds Rating Agencies Cannot Be Held Liable as ’33 Act Underwriters
In a May 11, 2011 opinion (here), a three-judge panel of the Second Circuit affirmed the dismissal of rating agency defendants in litigation filed under the Securities Act of 1933 and involving mortgage-related securities issues by Lehman Brothers and IndyMac and the Residential Asset Securitization Trust (RUST). The Second Circuit affirmed the District Court’s
Some Questions About the NYAG’s Lehman-Related Complaint Against E&Y
New York Attorney General Andrew Cuomo’s December 21, 2010 filing of a civil fraud lawsuit against Ernst & Young in connection with the audit firm’s services to Lehman Brothers has captured headlines in business pages around the world. The complaint itself, which can be found here, raises some serious allegations. But the complaint also
Schwab Withdraws from Subprime Securities Suit Settlement
There is a reason that when class action settlements are announced, they are described as preliminary and subject to final approval – sometimes the settlements fall apart before the case is finally put to rest. That appears be what has happened with the Schwab YieldPlus subprime-related securities class action lawsuit.
As discussed here
Lehman Bankruptcy, Defense Expenses, and D&O Insurance
The September 2008 collapse of Lehman Brothers resulted in the largest bankruptcy filing in U.S. history, as well as an explosion of litigation and regulatory actions and investigations. In the pending bankruptcy proceedings a recent motion by the debtor’s counsel details the massive legal costs accumulating in the various legal proceedings and also raises
Dismissal Motion Denied in Case Alleging Lehman-Related Exposure
As the subprime litigation wave evolved in late 2008, among the many cases arising were cases I described at the time as "new wave" subprime-related cases, where the target company’s financial problems were due not to the company’s own exposure to subprime-related assets, but rather due to the company’s exposure to other companies that suffered
Lehman Bankruptcy Examiner Cites Company’s “Balance Sheet Manipulation”
According to the March 11, 2010 bankruptcy examiner’s report, the collapse of Lehman Brothers was a result of the deteriorating economic climate, exacerbated by Lehman’s executives, whose conduct ranged from "serious but non-culpable errors of business judgment to actionable balance sheet manipulation."
The Report was prepared pursuant to a January 2009 bankruptcy court order