In my round-up of top D&O stories from 2021, I cited the recent rise of U.S. derivative lawsuit filings against the boards of non-U.S. companies as one of the year’s most important D&O liability and insurance stories. I was not alone in identifying this trend as a key development. Allianz identified the threat of these kinds of U.S. derivative suits against non-U.S. companies’ boards as one of the “five D&O mega trends companies should watch for and guard against in 2022.” However, recent developments could be interpreted to suggest that the threat from these kinds of lawsuits may turn out to be something less than feared.
As Alison Frankel noted in a January 4, 2022 post on her On the Case blog (here), “last week, two Manhattan state-court judges called off the revolution.” In the final week of 2021, two New York state judges granted motions to dismiss in separate derivative lawsuits filed in N.Y. courts against the boards of two non-U.S. companies. As discussed below, these two rulings potentially could spell the end for these kinds of lawsuits; at a minimum, it could mean that the threat may turn out to be significantly less than was feared – although as also noted below, there could yet be more of this story to be told.
Continue Reading Do Derivative Suit Dismissals Signal End of Non-U.S. Companies’ U.S. Liability Threat?