This summer, the Delaware Chancery Court arguably expanded the potential liability of independent directors of Delaware corporations by declining to grant summary judgment in favor of non-conflicted, independent directors that had allegedly accepted a buyout offer without performing standard due diligence about the fairness of the deal.
United States
New York State Court Reverses Demand Futility Dismissal Although Board Had Formed an SLC Before Litigation Was Filed
By Troutman Pepper Locke on
New York’s First Department recently issued a decision addressing the circumstances under which a company’s appointment of a special litigation committee (“SLC”) can shield its directors and officers from shareholder derivative litigation.
Second Circuit Affirms Dismissal Of “F-Cubed” Securities Class Action
By Troutman Pepper Locke on
Posted in D&O Liability, United States
The Second Circuit Court of Appeals has affirmed the dismissal of an “F-Cubed” securities class action — i.e., a securities class action brought by foreign investors who purchased shares in a foreign company on a foreign stock exchange — on subject matter jurisdiction grounds. …
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Hutchinson Technology Files Suit Against UBS Claiming That Auction Rate Securities Regulatory Settlements Are Not Enough
By Troutman Pepper Locke on
Posted in Subprime/Credit Crisis Developments, United States
Hutchinson Technology, Inc., a firm with a dual focus on computer hardware technology and health care technology, recently filed suit against UBS AG, UBS Financial Services and UBS Securities LLC (“UBS”) for allegedly fraudulently inducing Hutchinson to purchase millions of dollars in auction rate securities (ARS). …
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Prior Knowledge Exclusion in Warranty Letter Relieves D&O’s Insurer’s Obligation to Pay Increased Limits
By Troutman Pepper Locke on
The United States District Court for the District of Colorado recently held that a warranty letter’s prior knowledge exclusion barred coverage for defense costs incurred by the insured directors and officers in an enforcement action initiated by the SEC. A copy of the decision can be found here.
Vodafone Securities Class Action Dismissed For Lack of Subject Matter Jurisdiction
By Troutman Pepper Locke on
Posted in D&O Liability, United States
In November 2007, shareholders of Vodafone Group Plc (“Vodafone”) filed a securities class action complaint in the U.S. District Court for the Southern District of New York under section 10(b) of the Securities Exchange Act of 1934 (the”34 Act”) alleging that Vodafone and several of its directors and officers artificially inflated the price of Vodafone’s stock through allegedly false and misleading statements about its financial health and business prospects.
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New York Insurance Department Issues Circular Letter Regarding Late Notice Legislation, Which Takes Effect on January 17, 2009
“[A]ll liability policies” issued or delivered in New York on or after January 17, 2009 will be subject to the recent Legislation promulgated under Chapter 388 of the Laws of 2008 (the “Legislation”). The New York Insurance Department (“Department”) has issued Circular Letter No. 26 (2008), dated November 18, 2008, to remind liability insurers writing property/casualty policies of the changes resulting from the new law, and also to clarify certain aspects of the Legislation.
Cornerstone Report: Securities Class Action Filings Soar in 2008 Due to an Increase in Filings Against Financial Services Firms
By Troutman Pepper Locke on
Posted in D&O Liability, United States
Cornerstone Research, in cooperation with Stanford Law School’s Securities Class Action Clearinghouse, recently released its report on federal securities class action filings in 2008.
SCHIP Bill Passed Again By House
By Troutman Pepper Locke on
On January 14, 2009, the U.S. House of Representatives passed the Children’s Health Insurance Program Reauthorization Act of 2009 (H.R. 2) (the “Act”) by a vote of 289-139. The Act would expand coverage and extend the effective date of the State Children’s Health Insurance Program (“SCHIP”), which is set to expire at the end of 2009 fiscal year.
Did Hall Street Eliminate Manifest Disregard of the Law as a Valid Basis for Vacating or Modifying Arbitration Awards? A 2008 Summary of Conflicting Decisions
By Troutman Pepper Locke on
This past year we’ve followed the U.S. Supreme Court’s decision in Hall Street Associates, L.L.C. v. Mattel, Inc., No. 06-989 (U.S. Mar. 25, 2008), and whether courts have interpreted it as eliminating the doctrine of manifest disregard of the law, a judicially-created concept that provides parties with a basis for challenging an arbitration award beyond those grounds enumerated in the Federal Arbitration Act (“FAA”). …
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