supply chain

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As I have previously noted on this site (for example, here), a long-standing and frequently recurring litigation pattern has been the filing of a corporate or securities lawsuit in the wake of an antitrust enforcement action. In the latest example of this pattern, a plaintiff shareholder has alleged that Atkore, a PVC pipe manufacturer, misled investors by failing to disclose that its product pricing was being propped up by an alleged scheme with its competitors to fix prices. The securities suit filing follows a prior civil antitrust action against the company and its competitors. The securities suit, which in addition to representing an example of antitrust follow-on securities litigation, is also an example of a lawsuit arising out of a company’s post-COVID business operations. A copy of the February 21, 2025, complaint can be found here.Continue Reading Antitrust Allegations Lead to Securities Suit Against PVC Pipe Company

One of the more interesting developments in the securities litigation arena over the past several years has been the continuing influx of pandemic-related securities class action lawsuit filings. Here we are now approaching what will be the sixth year since the initial outbreak of COVID-19 in the U.S. and yet the pandemic-related suits are continuing to come in. In the latest example, last week a shareholder plaintiff filed a securities class action lawsuit against the toy company Hasbro, alleging that the company misled investors by claiming that the level of inventory it built up in response to pandemic lockdown-related consumer demand was appropriate, only to later announce it would have to incur substantial inventory reduction costs. A copy of the November 13, 2024, complaint against Hasbro can be found here.Continue Reading Toy Company Hit with Pandemic-Related Securities Suit

One of the more interesting recent litigation phenomena is that even though we are now well into the fifth year since the initial COVID outbreak in the U.S., COVID-related securities lawsuits continue to be filed. Indeed, in its recent survey of first half 2024 securities lawsuit filings, NERA noted COVID-related filings as one of the factors contributing to the volume of securities suit filing in the year’s first half, and indeed noted that COVID-related suit filings YTD were on pace to exceed the number COVID-related suit filings during the full year 2023. In the latest example of these securities suit filing trends, earlier this week, a plaintiff shareholder filed a COVID-related suit against cloud computing products company Extreme Networks, based on allegations that the company had misrepresented the long-term effects of COVID-related supply chain disruption on the company’s sales backlog. A copy of the August 13, 2024, complaint can be found here.Continue Reading Extreme Networks Hit with COVID-Related Securities Suit

Burkhard Fassbach

We live in an era of complex geopolitical risks. The current geopolitical environment presents significant challenges for companies and their boards of directors. In the following guest post, Burkhard Fassbach, a D&O lawyer in private practice in Germany, reviews the important risk management approaches and insurance solutions available for companies to try to address these complex geopolitical risks. I would like to thank Burkhard 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is Burkhard’s article.Continue Reading Guest Post: Risk Management and Insurability of Geopolitical Risks

The pandemic officially ended well over a year ago, but the pandemic’s effects continue to ripple through the economy and affect company’s operations and financial results. Moreover, these effects continue to translate into securities class action litigation. The latest example is the lawsuit filed earlier this week against the Canadian defense software company CAE, Inc., which was sued after the disruptive effects of the pandemic caused certain of its fixed-price long-term contracts to be more costly and less profitable, notwithstanding the company’s assurances that it was managing the “ongoing challenges posed by the pandemic.” A copy of the July 16, 2024, complaint in the lawsuit can be found here.Continue Reading Defense Firm Hit with COVID and Supply Chain Disruption-Related Securities Suit

SPACs were back in the business headlines again last Friday, as the news circulated that shareholders of Digital World Acquisition Corp., a special purpose acquisition company, had approved the proposed business combination with Trump Media & Technology Group, the corporate parent of Truth Social, Donald Trump’s social media company. On the same day, in a reminder of what has happened to all too many companies that merged with SPACs during the peak of the SPAC frenzy in 2020 and 2021, shareholders of a SPAC that merged with an electric vehicle company sued the directors and officers of the SPAC as well as the EV company, alleging that in the merger proxy statement the defendants failed to disclose multiple business problems at the target company. The lawsuit is the latest SPAC-related securities suit to be filed after the collapse of the SPAC surge.Continue Reading EV Company Hit With SPAC-Related Securities Suit

In my recent round-up of the Top D&O stories of 2023, I noted that one of the key drivers contributing to the number of securities class action lawsuit filings last year was the presence of macroeconomic factors affecting company operations and financial results. Among these factors was supply chain disruption. While the pandemic-related disruptions that snarled supply chains in 2021 and 2022 appeared to have eased during 2023, the impact from the earlier supply chain disruptions continues to weigh on some businesses.

 In the latest example of how the prior supply chain disruption continues to affect businesses and how that can translate into securities litigation, on January 16, 2024, a plaintiff shareholder filed a securities lawsuit against advanced driver assistance system company Mobileye Global, after the company announced that it anticipated lower than expected sales of its key product because its leading customers had built up product in 2023 in order to avoid supply disruptions of the type that resulted from supply chain constraints in 2021 and 2022. This latest lawsuit shows how the consequences from pandemic related supply chain disruptions are continuing to weigh on businesses and result in securities litigation. A copy of the January 16, 2024 complaint can be found here.Continue Reading Supply Chain Woes Causing Inventory Build-Up Leads to Securities Suit

In my recent roundup of the top stories in the world of directors’ and officers’ liability and insurance, I noted that a host of macroeconomic factors – such as supply chain disruptions and labor supply constraints — continue to weigh on companies and, in some instances, translate into securities class action litigation. I have also noted in numerous prior posts how COVID-19 has itself resulted in securities lawsuit filings. In the latest example of a securities suit filing resulting from these various phenomena, last week a shareholder plaintiff filed a securities lawsuit against the robotic aircraft systems development and service company AeroVironment after the company delivered disappointing results due to supply chain woes resulting from COVID-19. The complaint is both representative of these types of cases and illustrative of how these kinds of concerns, even after a significant time lag, can result in a current securities lawsuit filing. A copy of the plaintiff’s August 30, 2023, complaint can be found here.Continue Reading Robotic Aircraft Company Hit with COVID-19 and Supply Chain-Related Securities Suit

In my 2022 year-end wrap up of D&O insurance developments, I identified macroeconomic factors as among the sources of D&O claims during the past year including, among other things, interest rate increases, economic inflation, labor supply and supply chain disruption, and the Ukraine War. In various posts this year, I have noted that these factors continue to affect companies and to contribute to the number of securities class action lawsuit filings. In the latest example of the way in which these macroeconomic factors can translate into securities litigation, the drug and healthcare company Baxter International was sued last week due to the decline in the company’s share price after the company’s announcement that continuing supply chain woes were setting back its operations and financial results more significantly than the company had anticipated. The new lawsuit shows that macroeconomic factors such as supply chain constraints are continuing to contribute to securities lawsuit filings. A copy of the July 12, 2023, complaint against Baxter can be found here.Continue Reading Baxter Hit with Supply Chain-Related Securities Class Action Lawsuit

              

In the current economic environment, companies are wrestling with a host of macroeconomic issues, including rising interest rates, economic inflation, continuing labor shortages, and the war in Ukraine. In addition, another issue companies are facing in the wake of the pandemic is supply chain disruption, which continues to challenge some companies. In the latest sign…