(1) The New York Sun has an op-ed discussing whether the SEC should allow public companies to arbitrate securities claims. (See this post for earlier coverage of the reform proposal.)
Quote of note: “I’d wager that you wouldn’t see much of a share discount at all for companies that decided they’d rather arbitrate suits; you might even see a premium. Allowing an arbitration option would surely be a good market test of the efficacy of securities lawsuits.”
(2) The D&O Diary has an interesting post on outside director liability exposure. In particular, the post analyzes a recent settlement in which former outside directors of Just for Feet paid a total of $41.5 million to settle a bankruptcy trustee’s state court breach of fiduciary duty claim. The settlement came after the company’s D&O insurance was virtually exhausted in the settlement of a related securities class action.
Quote of note: “The Just for Feet settlement may provide the best example yet of the need for a separate Side A program dedicated solely to the outside directors’ protection — or better yet, for a separate Individual Director Liability (IDL) policy solely for the benefit of one individual or a group of outside directors. The existence of separate limits that cannot be depleted in resolution of others’ claims is the best protection against the possibility that individuals might be left to face their own liability exposure without insurance protection.”
The 10b-5 Daily 