News from this practice

In the current environment, a director’s or officer’s misstep can be fatal. Once upon a time, the intricacies of directors’ and officers’ liability might have been considered an arcane branch of corporate law, important but hardly newsworthy.

Not so today.

In a recessionary landscape of government bailouts and the bankruptcies of once blue-chip companies, where words like Enron or HealthSouth resonate in the consciousness of jurors, some of today’s most sensational financial and legal news focuses on directors and officers. Private plaintiffs, bankruptcy trustees and public entities all pursue directors and officers over the decisions they make and the work they do for public companies. Experienced representation is a necessity when corporate, professional and personal reputations are on the line. We have many years of experience representing  public and private companies (as well as investment banks, accounting firms and law firms) and their respective officers, directors, employees, partners and affiliates, in cases filed in federal and state courts. Our clients are major international, national and regional public and private companies, and their individual officers and directors. Our lawyers have handled all types of directors’ and officers’ litigation, including recovery actions brought by trustees of bankrupt publicly-traded companies.

Lightfoot lawyers frequently represent corporate officers and directors in federal and state courts. Some recent examples of our experience in this area include:

  • Representation of former officers, including in-house counsel, of the Vesta Insurance Group, a NYSE property and casualty insurer now in bankruptcy. The bankruptcy Trustee sued our clients, claiming breaches of fiduciary duties in their management of the company and demanding approximately $100 million in damages. The Lightfoot team coordinated and led the defense; retained, budgeted and managed experts; and defended the case in both bankruptcy court and federal district court.
  • Lead defense counsel for Colonial BancGroup, Inc., a multibillion dollar bank holding company formerly traded on the NYSE and  in bankruptcy. We represented certain of the Bank’s key officers and directors in a consolidated federal securities class action and related state and federal derivative litigation. The federal securities litigation (in an over 100 page amended consolidated complaint) involved allegations of securities fraud, GAAP violations and inadequate internal controls, among other claims. There were over 50 defendants in the case, including 40 underwriters and the Bank’s auditor. Lead Plaintiffs were public pension funds from around the country. The derivative litigation involved substantially similar allegations, brought in four separate suits (3 in state court, 1 in federal). We persuaded the court in the federal derivative action to dismiss the case for failure to make a pre-suit demand upon the Board.
  • Representation of Goldman, Sachs & Co. in multiple cases stemming from the Jefferson County, Alabama, sewer debt crisis.
  • Representation of the lead underwriter and eleven other major financial institutions in federal securities class actions in state court.
  • Representation of twelve current and former members of the board of directors and supervisory committee of large Alabama credit union in a derivative action.
  • Obtained dismissal for UK-based hedge fund accused of fraud and stock manipulation, which was affirmed on appeal, Walter Energy, Inc. v. Audley Capital Advisors LLP et al., Case No. 1131104, __ So. 3d. __ (Ala. 2015).
  • Defense of a state-chartered bank against claims alleging breach of fiduciary duty against bank related to asset-backed securities.
  • Representation of a publicly-traded insurance company in a shareholder class action suit arising from acquisition of large mutual insurance company.

Other notable D&O matters include the representation of one of the founders of HealthSouth, as well as directors and officers of Bruno’s and Bill Heard Chevrolet. We also regularly represent officers, directors, audit committees, businesses and individuals before Congress and federal regulatory agencies such as the Securities and Exchange Commission, and in white collar criminal matters in federal and state courts. Our lawyers have conducted numerous internal investigations for a wide variety of firms and companies, advising senior management and boards of directors in a practical business manner. For more details on this practice, please see our White Collar Criminal Defense and Corporate Investigations expertise page.

Together, the lawyers at Lightfoot can handle virtually any matter involving directors and officers.