Directors and Officers
Particularly in the post-Enron era, corporate directors and officers are often the target of litigation brought by creditors, shareholders and others – and the target of investigations undertaken by government entities such as the Securities and Exchange Commission. We have substantial experience in such matters. We are currently defending numerous individual directors and officers in litigation brought by creditors in the nation’s bankruptcy courts alleging that these individuals breached their fiduciary duties in connection with their companies’ downfall. We are also simultaneously defending certain of the same individuals against claims brought in other fora by the shareholders of the same companies alleging breaches of the federal securities laws.
Our practice also includes prosecuting claims brought for the benefit of creditors of other insolvent companies. Thus, we have been appointed special litigation counsel to the debtor-in-possession or trustee for certain bankrupt entities, and in that capacity have pursued claims against former directors and officers of those entities, among others. In connection with the bankruptcy of HA-LO Industries, our efforts have resulted in our client recovering tens of millions of dollars.
With respect to government investigations, we have represented and continue to represent individuals who find themselves the subject of such inquiries, particularly with respect to SEC investigations of potential insider trading and fraud.
Often our involvement in matters such as the foregoing entails addressing insurance coverage and indemnification issues. In defending individuals who are the subject of claims or investigations, we work to ensure that these individuals receive all the insurance coverage and indemnification to which they are entitled. Conversely, when we are bringing claims against directors and officers on behalf of other parties, we aggressively pursue recovery from insurance funds in an effort to make our clients whole. In connection with the HA-LO litigation, for example, we pursued bad faith actions against the five insurance companies providing HA-LO’s former CEO with Directors’ and Officers’ liability insurance, with the result that several million dollars in excess of the insurance policy limits were recovered for our client.