On July 2, 2010, in what is as far as I am aware the first
suit by the FDIC against former directors and officers of a failed bank as part
of the current wave of bank failures, the FDIC as receiver of IndyMac filed a lawsuit in the Central District of California against
four former officers of IndyMac's...
§ 5.08 Executive Compensation.
For years shareholders have complained of the highly lucrative executive
compensation arrangements maintained by their
companies, and some complaints have found their way into the courts. Examples
of such lawsuits include:
Viacom shareholders initiated a derivative...
The governance legacy of the recent credit
crisis is the importance of directors and officers effectively identifying,
quantifying and managing the company's most important risks. A new discussion
has been added which explains the purpose, importance and structure of an
Enterprise Risk Management...
The exposure to Insureds and their D&O insurers from securities class action lawsuits has escalated greatly over the last ten years. Much has been written about the explosion in the magnitude of settlements in those lawsuits. Unfortunately, this exposure is now getting even larger and...
My primary objective on this blog is to address important developments
in with world of directors' and officers' liability as they occur. From time to
time, however, readers contact me with more fundamental questions about
executive liability and protection, particularly regarding the basics...
New Chapter 27 explores the popularity of Side A D&O
Insurance policies, which have skyrocketed in recent years. Many insured and
insurers remain unclear as to how the policy should respond in various
circumstances and what is the true exposure being covered under a Side A
policy. This new chapter...
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...
Every fall since I first started writing this blog, I
have assembled a list of the current hot topics in the world of directors' and
officers' liability. This year's list is set out below. As should be obvious,
there is a lot going on right now in the world of D&O, with further changes...
With the first week of the New Year just about over, I
have come upon three more top issues lists for directors and management in
2011. Consider this an addendum to my Dec. 21 post .
One list comes from the very prolific and opinionated
Norman Marks of the Institute of Internal Auditors, a thought...
If you want to improve governance at a corporation, do
you need professional directors? Did SOX merely add a layer of legal
obligations of board, and do little to improve the quality of those serving as
Robert C. Pozen makes the case in The
Case for Professional Boards in the December...
In a unanimous March 22, 2011 opinion by Justice Sonia Sotomayor , the
U.S. Supreme Court rejected the argument of Matrixx Initiatives that adverse
product reports must be "statistically significant" in order for a
manufacturer to have an obligation to disclose the reports to investors....
In a unanimous March 22, 2011 opinion by Justice Sonia Sotomayor , the U.S. Supreme Court rejected the argument of Matrixx Initiatives that adverse product reports must be "statistically significant" in order for a manufacturer to have an obligation to disclose the reports to investors. As...
In a March 29, 2011 order ( here ),
Southern District of New York Judge Jed Rakoff granted the
defendants' motions to dismiss a pair of subprime-related derivative lawsuits
that had been brought against certain directors and officers of Merrill Lynch.
Because the plaintiffs -- former shareholders...
In a March 29, 2011 order ( here ), Southern District of New York Judge Jed Rakoff granted the defendants' motions to dismiss a pair of subprime-related derivative lawsuits that had been brought against certain directors and officers of Merrill Lynch. Because the plaintiffs -- former shareholders...
In Matrixx Initiatives, the
U.S. Supreme Court reaffirmed the case-by-case analysis for materiality that it
espoused in Basic Inc. v. Levinson, but it may also have signaled that the
pleading of materiality is subject to the standards found in Rule 8(a) of the
Federal Rules of Civil Procedure and not...
On March 22, 2011, the United States Supreme Court, in a
unanimous decision written by Justice Sonia Sotomayor, stated that the
"materiality" element of a claim for securities fraud under Section 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, "is
Plaintiff attorney James M.
Wilson, Jr. discusses the Supreme Court unanimous rejection of a
pharmaceutical company's attempt to inject a bright line test to determine what
"material" information is required to be disclosed to shareholders to
avoid liability in federal securities litigation...
Introduction: On June 6, 2011, the Supreme Court unanimously
rejected the Fifth Circuit Court of Appeal's requirement that plaintiffs in
securities class actions prove "loss causation" at the class
certification stage of the case. In order for investors to proceed as a class...
Introduction: On June 6, 2011, the Supreme Court unanimously rejected the Fifth Circuit Court of Appeal's requirement that plaintiffs in securities class actions prove "loss causation" at the class certification stage of the case. In order for investors to proceed as a class...
No surprise. The first derivative suit against HP
and its board of directors was filed in the Central District of California.
Here's the complaint: Espinoza
v. Leo Apotheker et al . It was filed on Wednesday - before Apotheker
was fired. So it's more concerned with Apotheker's recent...
SciClone Settles FCPA Follow-on Derivative
Suit : In a settlement that involves a company with
significant Chinese operations -- and that also may represent something of a
template for the settlement of FCPA enforcement follow-on civil lawsuits --
SciClone Pharmaceuticals and the individual defendant...
In a story in the D&O
Diary , entitled " More
Woes for Companies with Chinese Connections ", Kevin LaCroix discussed
the settlement reached by the entity SciClone Pharmaceuticals, and its
individual defendant directors and officers, in litigation involving three
Indemnification is the first and most important line of
defense for the protection of directors and officers. But corporate officials
are not always entitled to indemnification. For example, under Delaware law,
they cannot claim mandatory indemnification if their defense is not successful.
In an interesting March 31, 2014 opinion ( here ), the Unites States Court of Appeals for the First Circuit, applying Puerto Rico law, affirmed a district court’s ruling that the D&O insurer for the failed Westernbank of Mayaguez, Puerto Rico must advance the bank’s former directors’...