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Avoiding the Pitfalls of Stipulated Settlements
An officer of a corporation is named as a defendant in a shareholder derivative suit. After reading the complaint, which includes allegations that the officer committed a breach of certain fiduciary duties owed to the corporation, the officer promptly notifies his directors and officers' liability insurer of the lawsuit. Because the applicable policy contains exclusions that may potentially exclude some, if not all, of the claims, the insurer agrees to defend the officer subject to a full and complete reservation of rights.
Upon receipt of the insurer's reservation of rights letter, the officer becomes concerned that, if the insurer later contests coverage, he may face significant personal exposure. To eliminate this risk, the officer explores the possibility of entering into a settlement with the plaintiff. The plaintiff suggests that the parties stipulate to the entry of a judgment, which is vastly in excess of the suit's true value, and the plaintiff will provide the officer with a 'covenant not to execute,' which protects the officer from personal exposure. In return, the officer will assign to the plaintiff his rights under the policy, including any claims that the insurer acted in bad faith. Armed with the stipulated judgment and an assignment from the insured, the plaintiff files a direct action against the insurer to reach and apply the insurance proceeds to satisfy the outstanding judgment and, pursuant to the assignment, seeks extra-contractual damages on the basis that the insurer acted in bad faith. Suddenly, the insurer is faced with not only litigating whether coverage exists for the inflated judgment, but also defending against a bad faith claim.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Beach Boys Songs Written Decades Ago Triggered Current Quarrel With Lawyers
There's current litigation in the ongoing Beach Boys litigation saga. A lawsuit filed in 2019 against Nevada residents Mike Love and his wife Jacquelyne in the U.S. District Court for the District of Nevada that alleges inaccurate payment by the Loves under the retainer agreement and seeks $84.5 million in damages.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Transfer Tax Implications on Real Property Leases
The real property transfer tax does not apply to all leases, and understanding the tax rules of the applicable jurisdiction can allow parties to plan ahead to avoid unnecessary tax liability.