Commentary: Copyright Bandits At Large
The Supreme Court will soon decide whether to hear one of the most important commercial cases to reach the Court in decades. <i>MGM v. Grokster</i> raises a copyright challenge to the Internet-based services that enable millions of users around the world to swap digital copies of sound recordings and movies with a few clicks of a mouse. At stake is the legitimacy of our copyright system in the digital age.
Beyond Sarbanes-Oxley: Conscientious Compliance
A confluence of various regulations and court decisions, beyond Sarbanes-Oxley, has made it de rigueur to adopt corporate codes of conduct or corporate compliance and ethic programs. But arguably, and not fully appreciated, the only thing that could be worse for directors and officers these days than not having adopted a corporate compliance program, is having adopted one and not effectively implementing it. Boards of directors and their advisors must now focus on not merely adopting programs, but on establishing procedures and processes that provide active oversight of directors of compliance programs.
Cash-Out Distribution Plans Require Amendment
Qualified retirement plans that provide immediate cash-out distributions to a terminated participant if the vested benefit is "$5000 or less" must be amended to comply with Department of Labor (DOL) final regulations. The final regulations are effective for rollovers of mandatory distributions made on or after March 28, 2005. The final regulations provide a safe harbor for fiduciaries of tax-qualified pension plans that are required to roll over plan benefits into an individual retirement plan when a terminated employee fails to elect a distribution method.
EU Corporate Guidelines
The first challenge and most important need is to know what the relevant EU corporate guidelines are, to know where they apply and to know how to find them. Unlike the United States, where corporate matters are generally covered by individual state law, in the European Union these matters have long attracted centralized legislation from Brussels, which affects the entire EU (now 25 countries, which in 2007 will be joined by Bulgaria and Romania). Norway and Switzerland (although not in the EU) often legislate regarding these matters much as EU member countries do and thus, for our purposes here, we can talk about 29 countries in Europe rather than the 25 that currently make up the EU.
Title Insurance for the Mezzanine Lender
Present-day real estate financing is significantly more complex than traditional financing. Sobered by borrower bankruptcies and compelled by rating agency requirements in the modern day era of mortgage securitizations, lenders are now looking to "mezzanine loans" to bridge the gap between senior debt and borrower equity. A mezzanine loan will often cover 50% to 90% of the equity required to acquire a property. In order to secure the repayment of a mezzanine loan, a lender customarily requires a pledge of the partnership or membership interests of the property owning entity.
Conspiracy Theory: Coverage for Claims Involving Allegations of Conspiracy
Plaintiffs in mass tort cases always have had a knack for expanding the universe of potential defendants, seeking the maximal number of deep pockets in each case. Historically, doctrines such as market-share liability and concert of action have been relied upon by plaintiffs to access all the participants in an industry, based on the acts of only some of the participants therein. Recently, as those theories of broadened liability have begun to meet with judicial resistance, plaintiffs have turned to an ancient common law doctrine through which to expand the number of available defendants in mass tort suits: the conspiracy theory. The focus of this article is on the question of whether industry participants accused of participating in such an alleged conspiracy can and should properly expect their liability insurers to defend such suits and indemnify any loss resulting therefrom. As shown below, there is no categorical bar to coverage for conspiracy liability in standard-form comprehensive general liability policies ("CGL"). Instead, coverage turns on the object of the alleged conspiracy and the injury suffered. Although many courts have shown great hostility to coverage for conspiracy-only claims, in many circumstances arising in the context of traditional mass tort suits insureds should be entitled to a defense (certainly) and indemnity (depending on the facts).
'Follow the Settlements' Doctrine: Implications on a Reinsured's Allocation and Aggregation of Losses
The applicability of the bedrock reinsurance principle of "follow the settlements" is at the core of an increasing number of recent reinsurance disputes concerning whether a reinsurer must follow the manner its reinsureds allocate and aggregate underlying losses. Over the last 5 years, a number of courts have addressed whether the doctrine of "follow the settlements" precludes a reinsurer from second-guessing its reinsured's determination of how it allocated and/or aggregated losses in resolving disputes with the underlying insured. As discussed more fully below, reinsureds typically argue that under the "follow the settlements" doctrine, a reinsurer must defer to the allocation and aggregation decisions of its reinsured, provided those decisions are made in good faith. Reinsurers on the other hand, typically argue that "follow the settlements" is not unlimited, but that the reinsured's decisions must be consistent with the language of the reinsurance agreement.
An Increase in Mass Tort and Environmental Claims Activity is on the Horizon: Prepare Now To Advise Clients About the Right Insurance
Environmental insurance has become a core element of corporate risk management programs, which are presently being utilized in commercial real estate transactions, sales of businesses, and to resolve mass tort and product liability litigation. Attorneys should consult with knowledgeable environmental insurance brokers to understand clients' environmental liability exposures. An environmental liability exposure can be related to a product, toxic tort, or cleanup of a hazardous waste site. In situations where there is a known potential environmental exposure, environmental markets assess the costs associated with the known environmental liability and provide insurance above those projected costs. This insurance is called "cost overrun insurance." Environmental policies also insure against the risk of unknown environmental exposures. There are several ways to insure against this liability. For example, environmental policies can include combined coverage for general liability, products, and pollution. In addition, combined finite funding and risk transfer programs have been developed as a risk management strategy to address asbestos, silica, manganese, products liability, toxic tort and other general liability risks.
