D&O Liability

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Two D&O insurers have asked the U.S. Bankruptcy Court for the District of Minnesota to lift an automatic stay in a bankruptcy proceeding pending against their insureds so that the insurers can pursue their coverage defenses as counterclaims against the insureds in a pending declaratory judgment action. 

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Read More D&O Insurers Seek Relief from Automatic Stay in Order to Assert Coverage Defense Counterclaims Against Investment Firm Insureds

In a short letter-to-counsel opinion, Vice Chancellor John Noble of the Delaware Chancery Court held that a prior order granting advancement to two officers and directors can be modified based on changes in factual circumstances. …
Read More Delaware Court: Right to Advancement of Defense Costs for Defamation Suit can be Modified Based on Changes in Factual Circumstances

The White House proposed legislation to Congress last week that would require investment advisors to private equity, venture capital and hedge funds with more than $30 million in assets under management to register with the Securities and Exchange Commission (SEC).  The proposed legislation marks the most extensive effort to date to register and oversee the private equity, venture capital and hedge fund markets. 

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Read More White House Proposes SEC Registration and Oversight of Private Equity, Venture Capital and Hedge Fund Advisors

In a highly anticipated decision, the United States Court of Appeals for the Second Circuit affirmed last week that investment advisor Hennessee Group LLC could not be liable on the claims asserted by one of its clients for recommending that the client invest in a hedge fund that turned out to be nothing more than a Ponzi scheme perpetrated by Bayou Group LLC. …
Read More Second Circuit Upholds Dismissal for Advisor Who Recommended Bayou Group Hedge Fund

On June 16, 2009, plaintiff Kathryn Squires voluntarily dismissed, without prejudice, the lawsuit filed on behalf of iShares Trust shareholders. …
Read More Update: Shareholder Lawsuit Against Company that Invested in Lehman Bonds a Day Prior to Lehman’s Bankruptcy Has Been Voluntarily Dismissed

Responding to concerns voiced by shareholder activists and others, the Securities and Exchange Commission has approved a rule change by the New York Stock Exchange that eliminates broker discretionary voting in uncontested elections for directors. …
Read More Broker Discretionary Voting for Directors Eliminated – Smaller Companies Will Need to Work Harder for the Retail Vote

On July 1, 2009, the Department of Justice announced that it had entered into a deferred prosecution agreement with homebuilder Beazer Homes USA (“Beazer’) in connection with its alleged mortgage and accounting fraud. 

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Read More Beazer Homes Enters Deferred Prosecution Agreement Regarding its Subprime Mortgage Origination Practices

Investors of iShares Trust, (“iShares”), a investment management company, filed a federal class-action lawsuit against the company and certain of its directors and officers alleging, among other things, violations of Section 80a-13 of the Investment Company Act of 1940 (the “ICA”) as a result of iShare’s investment of 11 percent of a corporate bond fund, approximately $400 million of the fund’s total net assets, in Lehman Brothers (“Lehman”) subordinated bonds on the eve of Lehman’s demise. 

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Read More Shareholders File Suit Following Company’s Decision to Invest Eleven Percent of Assets in Lehman Brothers – On Day Before Lehman’s Collapse