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Paul, Weiss is widely recognized as having one of the nation’s preeminent securities litigation and regulatory practices. For two decades, our lawyers have guided global corporations and financial institutions through a series of “bet-the-company” securities-related crises, consistently reducing or eliminating their most damaging claims and negotiating favorable resolutions.
Audra Soloway and Daniel Sinnreich Featured on Marsh UK’s Individual Liability Podcast
December 15, 2021
Litigation partner Audra Soloway and associate Daniel Sinnreich were featured on the most recent episode of Marsh UK’s Individual Liability podcast series. In the episode, “Shareholder Derivative Suits Against Non-U.S. Companies in U.S. Courts,” Audra and Dan discussed the emerging trend of shareholder derivative actions against directors and officers of non-U.S. companies in U.S. courts. Dan and Audra were joined by Stephanie Pestorich Manson, Marsh UK’s chief client officer and head of D&O product for management liability. Marsh UK is a global leader in insurance broking and risk management.
“Many jurisdictions outside of the United States make it difficult or sometimes even impossible for shareholders to file derivative suits,” said Audra. “These obstacles remain a powerful deterrent to the filing of derivative suits in U.S. court on behalf of non-U.S. corporations, because the law that’s going to be applied is foreign law under the internal affairs doctrine, and foreign law may not allow that case to move forward.”
Audra added that the recent uptick in derivative suits filed on behalf of foreign companies began in 2018, when a New York State appellate court allowed a derivative suit to proceed on behalf of a U.K.-based bank despite the plaintiffs’ failure to get permission from the English High Court to file the suit per U.K. law, in one of the first such instances a U.S. appellate court has made such a move.
“In the past, U.S. courts have routinely dismissed derivative lawsuits involving non-U.S. companies on the ground that the plaintiffs in those lawsuits failed to comply with prerequisites from the company’s place of incorporation,” Dan explained. “But in this case, the New York appellate court held that the judicial permission requirement of the U.K. Companies Act was procedural in nature as opposed to substantive, and therefore that the rule did not apply in New York state court.
“The lawsuit has driven an increase of these sorts of lawsuits being filed in the U.S. against non-U.S. companies and frankly, we don’t expect that trend to break anytime soon,” he added.