FRT’s Fast Five: Week Ending January 28, 2022
Financial Recovery Technologies Fast Five provides you with the top news in shareholder class actions. Stay up-to-date on the latest developments in settled (U.S./Canada) claims filing opportunities, Antitrust settlements, Global Group Litigation matters and more. For more information, contact your Financial Recovery Technologies representative or email us.
1. Steinhoff Wins Approval for $1.6 Billion Global Settlement
Steinhoff International Holdings NV can start paying out a 1.4 billion euro ($1.6 billion) settlement to investors who lost out in the wake of the retailer’s 2017 accounting scandal, drawing a line under years of legal battles. The plan to resolve more than $8 billion of combined claims was approved by a South African High Court on Monday, the final hurdle the company needed to overcome. The proposal had already been signed off on in the Netherlands, where Steinhoff is registered, while some parties who initially opposed the deal had agreed to settle. Click here to read the full article (subscription may be required).
On 7 January, the district court in the long-running securities class action filed on behalf of investors in Toshiba’s unsponsored ADRs delivered another curveball by denying class certification in its entirety. In its most recent decision, the district court held that the named plaintiffs were atypical class representatives because they actually purchased the unsponsored ADRs in foreign transactions. The decision holds several important lessons for foreign issuers, including because it underscores the importance of pushing for extraterritoriality issues to be resolved at an early stage of the litigation. The decision also highlights that foreign-law securities claims can present complex and unsettled issues of foreign law, providing further support for dismissing such claims under comity principles. Click here to read the full article.
3. Australian Class Action Reforms Would Leave Most Cases Unviable, Lawyer Warns
The Morrison government’s class-action reform will leave regional Australians worse off, is “a direct interference into an already regulated industry” and should be “scrapped in its entirety”, a Queensland lawyer has told the Senate. Senators across the political spectrum ordered the Attorney-General’s department to explain the constitutional basis for the bill in committee hearings this week, in which Bundaberg-based lawyer Tom Marland appeared. Attorney-General Michaelia Cash has tried to claim public interest immunity over sharing legal advice regarding why the government has the constitutional right to legislate over class actions, and is refusing to even reveal what heads of power she plans to rely on. Click here to read the full article (subscription may be required).
4. Judge Says Pot’s Illegality Forces Him to Gut Investors’ Suit
A Colorado federal magistrate judge on Monday dismissed with prejudice a large portion of the claims against a cannabis company and its principal in a suit brought by investors who alleged that the principal employed a “shell game” to siphon assets from the business, stating that he cannot grant relief or remedy for an alleged scheme involving a federally illegal business. All the investors’ derivative claims brought on behalf of nominal defendant Clover Top Holdings LLC were also dismissed, but some of the investors’ direct claims, including fraudulent and negligent misrepresentation, breach of fiduciary duty and unjust enrichment, were left in place or narrowed. Click here to read the full article (subscription may be required).
5. Caremark’s Comeback Includes Potential Director Liability in Connection With Data Breaches
A Caremark-based claim against a board of directors alleging a failure to monitor corporate operations has been said to be “the most difficult theory in corporation law upon which a plaintiff might hope to win a judgment,” or at least to withstand a motion to dismiss. Yet, Caremark has taken on renewed importance following recent high-profile successes on duty-to-oversee claims, most notably in Marchand v. Barnhill in 2019 and In re Boeing in September 2021, and recent shareholder lawsuits, alleging that data breach- and cybersecurity-related failures would have been preventable were it not for oversight failures by corporate officers and directors, are being plead asserting Caremark claims. Click here to read the full article.
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