Time To Check Your D&O Coverage
June 27, 2005
It has become clear that not all D&O insurance coverages are created equal. And, in many instances, your policy may not provide the coverage that you count on. Clearly, in recent years, liability exposure for corporate directors has significantly increased. The erosion of protection not only for outside directors but also directors and officers generally, is a direct result of the corporate scandals that have erupted over the last several years, in one case creating the largest corporate bankruptcy in history, all due in large measure to fraudulent activity on the part of some.
Employee Background Checks: The Dos and Don'ts
June 27, 2005
Whether your company is in the Fortune 500 or a small independent business, hiring and retaining qualified honest employees is critical to your success. In fact, a recent study showed that almost half of all job applicants submitted inaccurate or incorrect information to their potential employees. Given these alarming statistics, it is vital that you conduct background checks even before making hiring decisions.
The Dangers of Electronic Discovery: Lessons From Morgan Stanley
June 27, 2005
The Morgan Stanley case is the most recent example of the perils that corporate defendants face in the era of electronic discovery. Electronic evidence, and especially e-mail, now plays a starring role in litigation and investigations involving large corporations, particularly in areas such as employment discrimination, fraud and corporate mismanagement. Judges are increasingly familiar with electronic discovery, and are increasingly willing to impose heavy sanctions on corporations who do not comply with electronic discovery requests. As the Morgan Stanley case shows, the consequences of these sanctions can be dire. Therefore, it is important that companies take heed of the lessons of the Morgan Stanley case, and ensure that they have in place a comprehensive and effective system to recover and produce electronically stored documents.
Workplace Wellness Meets Employment Law
June 27, 2005
For at least 40 years, public policy has favored limiting employer intrusion into employees' personal lives. While certainly not the first incursion into this divided territory, the growing trend of employer wellness programs blurs the boundary significantly. Indeed, wellness programs are fashioning a new public policy ' one favoring employer involvement in improving employee health.
You Just Can't Give it Away
June 27, 2005
Companies in Chapter 11 may have capital structures consisting of multiple tiers of debt and equity that have competing priorities of payment vis-'-vis the company and its assets. The claims and interests of these competing stakeholders may be resolved in a Chapter 11 plan. To emerge from Chapter 11, the company must obtain approval of a plan that deals with all creditor claims and equity interests in accordance with the (sometimes complicated) rules contained in the Bankruptcy Code. In an effort to achieve an agreed-upon Chapter 11 plan, some creditors may give up (or gift) a portion of the recovery to which they would otherwise be entitled to another class of creditors or equity holders.
Retention of Restructuring Professionals
June 27, 2005
Restructuring professionals must be acutely aware of potential conflicts of interest. Indeed, federal courts on occasion have disqualified a professional or ordered the disgorgement of the professional's fees in situations where that professional failed to properly disclose a conflict of interest. The importance of conflicts of interest is especially evident in today's global economy, in which restructuring matters routinely involve many of the same parties.
Key Creditors' Rights Decision
June 27, 2005
The Second Circuit handed down a key creditors' rights decision on April 1 in <i>Sharp Int'l Corp. v. State Street Bank & Trust Co. (In re Sharp Int'l Corp. & Sharp Sales Corp.)</i>, 2005 U.S. App. LEXIS 5241(2d Cir. Apr. 1, 2005). The court affirmed the lower courts' finding that a secured lender was not liable for aiding and abetting management's breach of fiduciary duty, and not liable for receiving a $12.25 million loan repayment from a closely held borrower it correctly suspected of engaging in massive fraud. The decision limits the scope of a lender's duties to its borrower and other creditors. Absent the lender's participation in its borrower's fraud, the lender should have no liability on a fraudulent transfer theory or on any other basis, at least in New York, where Sharp arose.
Defending the Pediatric Traumatic Brain Injury Case
June 27, 2005
Each year, millions of Americans, including some children, suffer non-penetrating, or closed, head injuries. When lawsuits result, they involve complex medical, academic, and legal issues. When the plaintiff is a child, the defense attorney faces numerous additional challenges in defending the matter. Certain discovery tools are necessary to simplify and defend the pediatric traumatic brain injury (TBI) lawsuit. These tools, although also used in traditional personal injury cases, take on added significance because of the age of the plaintiff and the nature of the injury.
Fen-Phen: The Never-Ending Story
June 27, 2005
The national settlement of the fen-phen lawsuits was intended, among other things, to help defendant Wyeth, one of the world's largest pharmaceuticals manufacturers, put the lawsuits behind it. However, the number of claimants who opted out of the settlement is huge, and many of their cases are now coming to trial, with mixed results. Recently approved changes to the settlement process are also altering plaintiffs' rights. In short, the last chapter of this epic litigation is a long way from being written. So, what is happening with the fen-phen settlement and litigitions?
