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In the latest example of claimants seeking to assert the newly revitalized type of claim for breach of the duty of oversight against corporate boards, plaintiff shareholders have filed a derivative lawsuit in Delaware Chancery Court against certain past and current directors of technology company SolarWinds, based on the massive cybersecurity incident involving the company’s software and systems discovered in December 2020. As discussed below, there are several interesting features of this lawsuit in light of recent developments involving claims for alleged breaches of the duty of oversight. A copy of the heavily redacted publicly available version of the plaintiffs’ complaint against the SolarWinds board can be found here.
Continue Reading Cybersecurity-Related Breach of the Duty of Oversight Claim Filed Against SolarWinds Board

In what is one of the largest derivative lawsuit settlements ever, and — according to the statement from one of the co-lead plaintiffs in the case — the largest settlement ever in Delaware of a Caremark/breach of the duty of oversight case, the parties to the Boeing 737 Max Crash shareholder derivative suit in Delaware Chancery Court have agreed to settle the case for a payment of $237.5 million, all of which is to be funded by D&O insurance. As part of the settlement, the company also agreed to adopt several safety and oversight protocols and other corporate governance measures. The settlement is subject to court approval. A copy of the November 5, 2021 statement of the co-lead plaintiff, New York State Comptroller Thomas DiNapoli, about the settlement can be found here. A copy of the parties’ settlement stipulation can be found here.
Continue Reading Boeing Air Crash Derivative Lawsuit Settles for $237.5 Million

An online event firm that experienced a ramp-up in users during the pandemic and that completed an IPO in early in February 2021 has been hit with a securities class action lawsuit after the company disclosed that many of the customers that signed on during the early days of the pandemic did not renew or renewed only at lower service levels. This new lawsuit is the latest of example of the ways that more than a year and half in the pandemic continues to affect businesses and continues to lead to securities class action litigation and other D&O claims. The November 3, 2021 complaint filed against ON24 can be found here.
Continue Reading Online Event Firm Hit with Post-IPO COVID-Related Securities Suit

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

As I have noted on this site, the SEC has in recent months filed SPAC-related enforcement actions, including the action filed in July 2021 against Stable Road Acquisition Corporation (discussed here), and the Y, 2021 action filed against Nikola Motors founder Chad Milton (discussed here). These matters were not, however, the first SPAC-related SEC enforcement actions; there have been others previously, including the September 2020 SPAC-related enforcement action against music streaming company Akazoo, S.A. In something of a milestone regarding SPAC-related actions, on October 27, 2021, the SEC announced that it had reached a settlement of the Akazoo enforcement action. The SEC’s October 27, 2021 press release about the settlement can be found here. The October 27, 2021 Agreed Final Judgment in the Enforcement Action can be found here.
Continue Reading SEC Enters Settlement in SPAC-Related Enforcement Action Against Akazoo

A Canadian-based deep-sea mining company is the latest firm to be hit with a SPAC-related securities class action lawsuit. The company, which plans to mine the seabed for materials to be used in electric vehicles batteries, merged with a SPAC in September 2021. The company’s share price recently declined following news reports and a short-seller report questioning the company’s financing, licensing, and its claimed sustainability credentials. A copy of the October 28, 2021 complaint can be found here.
Continue Reading Deep-Sea Mining Company Hit with SPAC-Related Securities Suit

In the latest SPAC-related securities class action lawsuit filing, a plaintiff shareholder has filed a securities class action suit against electric vehicle company Lightning eMotors and certain of its directors and officers, after the company disappointed investors in its first post-SPAC-merger financial release. As discussed below, the Lightning eMotors SPAC-merger transaction was already the subject of a separate, prior Delaware Chancery Court action. A copy of the new federal court securities class action lawsuit complaint can be found here.
Continue Reading Electric Vehicle Company Hit with Post-SPAC-Merger Securities Suit

Larry Fine

As I noted in a recent post, there recently has been an increase in excessive fee litigation against plan fiduciaries. In the following guest post, Larry Fine takes a look at recent developments in excessive fee litigation, and the implications for the fiduciary liability insurance industry. Larry is the Management Liability Coverage Leader at Willis Towers Watson. I would like to thank Larry 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 Larry’s article.
Continue Reading Guest Post: Excessive Fees, Excessive Fiduciary Litigation: A Balanced Look

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

In the latest dismissal motion ruling in a COVID-19-related securities class action lawsuit, the federal judge presiding over the securities suit filed against private prison company The GEO Group has granted the defendants’ motion to dismiss with respect to the plaintiff’s coronavirus-related allegations, while denying the motion with respect to certain of the plaintiff’s allegations unrelated to COVID-19. A copy of the court’s September 23, 2021 order can be found here.
Continue Reading COVID-19-Related Securities Claims Against Private Prison Company Dismissed