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

Early this spring, when I wrote the first installment in this series of updates about the impact of the coronavirus outbreak on the D&O liability and insurance arena, the general assumption was that the virus would spread for a couple of months during the spring and that by summertime things would be returning to normal. Very few people I know were predicting that when July actually did roll around that the number of confirmed cases, both nationally and globally, would be setting daily record highs. Even as recently as my most recent update last month, there were hopeful signs as the country re-opened for business. Unfortunately, the disease has proven to be more widely-distributed and the outbreak longer-lasting than earlier anticipated, and the expectations about the pandemic’s economic, social, and political impacts have also changed. All of these developments have implications for the pandemic’s impact on the D&O arena as well. In this latest update, I review the the pandemic’s D&O consequences and likely future impact.
Continue Reading COVID-19 and D&O Insurance: July Update

As regular readers know, over the last few months, I have been closely following the rise of coronavirus outbreak-related securities class action lawsuits. To date, though the pandemic is a global health and economic phenomenon, the pandemic-related securities litigation activity has been limited to the United States. In the following guest post, Jason Symons, Persia Navidi, Claudia George, and Luke Roper of the HWL Ebsworth Lawyers take a look at the possibilities for COVID-19-related securities class action lawsuits in Australia. 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 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: The Potential for COVID-19-Related Securities Class Actions in Australia

In the latest coronavirus outbreak-related securities class action lawsuit to be filed, a plaintiff shareholder has filed a securities class action lawsuit against The GEO Group, a publicly traded private corrections facilities operator, alleging that the company misled investors about the effectiveness of its COVID-19 response. The complaint alleges that the company’s “inadequate” procedures subjected residents of the Company’s halfway houses to significant health risks. The company’s share price declined following news reports of a COVID-19 outbreak at one of the company’s facilities. A copy of the plaintiff’s complaint can be found here.
Continue Reading Private Prison Firm Hit with COVID-19 Outbreak-Related Securities Suit

As the pandemic has unfolded, a recession has followed in its wake, as a result of which many companies are struggling. Some will not survive – a number of high profile companies, such as Hertz and Neiman Marcus, have already filed for bankruptcy. Many others have issued financial filings containing a “going concern” disclosure or received an audit opinion with a going concern modification. The government shutdowns and other disruptions that have followed in the wake of the coronavirus outbreak have placed an enormous burden on many businesses. The going concern disclosures filed in the year’s first half reveal how many companies are struggling to stay afloat and what might be in store in the months ahead.
Continue Reading Concerns About “Going Concern”

As readers know, since the beginning the coronavirus outbreak in the U.S., I have been tracking the coronavirus-related D&O lawsuits as they are filed. As the lawsuits have started to accumulate, one challenge has been keeping a firm grasp on what it is that makes a lawsuit coronavirus-related. In the following post, I discuss two recently filed securities class action lawsuits that after some deliberation I have decided to include on the list of coronavirus-related securities suits. Though I have included them on the list, I will be the first to acknowledge that that the inclusion of these lawsuits, particularly the second of the two discussed below, is not beyond question. My hope is that by going through my logic for including the two lawsuits and my reasoning for including them on the list that readers will weigh in and share their thoughts about whether either or both of these lawsuits properly should be classified as coronavirus-related. I describe the two recently-filed lawsuits below, along with a description  of my reasons for including them on the list.
Continue Reading Do These Two New Lawsuits Belong on the List of COVID-19-Related Securities Suits? 

A plaintiff shareholder has filed a securities class action lawsuit against a diagnostic testing company alleging that the company misrepresented the accuracy of its COVID-19 antibody test. The company’s share price, which had risen on the news of the FDA’s authorization of the company’s test, declined after the FDA announced it was revoking the authorization due to performance concerns with the accuracy of the test. As detailed further below, this new lawsuit is the latest in a series of securities suits that have been filed since the coronavirus outbreak began against companies that are alleged to have made misrepresentations concerning their ability to provide coronavirus-related therapies, testing, or equipment.
Continue Reading Investor Files COVID-19 Related Securities Suit Against Testing Company

In the latest securities class action lawsuit alleging that the defendant company tried to position itself to investors as able to profit from the coronavirus outbreak, a plaintiff shareholder has filed a securities suit against a company that claimed to have developed COVID-19 tests that were 100% accurate. The plaintiff alleges company’s share price soared based on the company’s statements, but later fell when news reports and regulator statements began to circulate casting doubt on the company’s claimed testing accuracy. A copy of the June 15, 2020 complaint filed against Co-Diagnostics, Inc. can be found here.
Continue Reading Securities Suit Hits Company that Claimed 100% Accurate COVID-19 Tests

A lot has happened since early March, when I first wrote about the possibility that the coronavirus outbreak could lead to D&O claims. At that time, there were only 43 confirmed cases of COVID-19 in the United States and six deaths. Now, three months later, there have been over 2 million confirmed cases in the U.S. and over 115,000 deaths. Along with the public health crisis, a dramatic business downturn has unfolded over the last three months as well, one that likely will continue to effect the economy for months to come. Among other things, in the wake of these dramatic events, a number of disputes have developed, including litigation affecting corporate directors and officers. In this latest installment in my continuing series of monthly reports about the D&O consequences arising from the coronavirus outbreak, I have provided an overview of the developing claims trends, as well as the impact both the circumstances and the claims trends have had on the D&O insurance marketplace.
Continue Reading COVID-19 and D&O Insurance: The Latest Update

The troubled deal in which Advent International Corporation was to acquire cybersecurity firm Forescout Technologies, Inc. is already the subject of litigation pending in Delaware Chancery Court, and indeed a trial in the Delaware merger dispute case is scheduled for July. Now Forescout shareholders have filed a separate securities lawsuit, alleging that between the time the deal was announced in February 2020 and the time that Forescout announced in May 2020 that Advent had advised Forescout that Advent would not “consummate” the acquisition, Forescout made a series of misrepresentations about the company’s financial condition and performance. Among other things, the investors allege that Forescout misrepresented or omitted to disclose the impact that the COVID-19 outbreak was having on its financial performance.  A copy of the plaintiffs’ June 10, 2020 complaint can be found here.
Continue Reading Securities Suit Alleges Cybersecurity Company Misrepresented COVID-19 Impact