Oversight in Hindsight – Managing Director Risks & Liability
Being a corporate director can be a risky business. Today’s directors work in an environment where expectations regarding Board oversight and performance have been heightened, and the scrutiny of Board activities and policies is intense. In addition to reputational damage, directors who are perceived not to have met those expectations can be exposed to lawsuits by, among others, the company, stockholders, creditors, employees, and state and federal regulators. Directors, quite understandably, should be concerned regarding their potential exposure to public embarrassment and/or personal liability and the steps that can be taken to insulate them from any such deleterious consequences.
Our panel of experts will discuss the various protections available to boards and their individual members. Topics to be addressed will include (i) what are the warning signs to look for before joining a board, (ii) recent sources of litigation against directors, (iii) case law developments regarding director exculpation, indemnification and advancement, and (iv) current trends in D&O insurance.
Mr. De Rose is a Managing Director in Houlihan Lokey Howard & Zukin's New York office, where his primary responsibilities providing investment banking, valuation and
transactional opinion services. Heis a member of the Firm's Fairness, Solvency and
Technical Standards Committees. With over 20 years of investment banking experience, he has extensive expertise in successfully managing complex transactions across a broad spectrum of industries.
Before joining Houlihan Lokey, Mr. De Rose served as managing director in the Mergers & Acquisitions Group of Bear, Stearns & Co. Inc. In that capacity, he advised clients in negotiated mergers and acquisitions, divestitures, leveraged buyouts, contested takeovers, and proxy fights — completing over 100 M&A transactions. He was also a managing director in the Bear Stearns's Financial Restructuring Group, advising debtors, senior lenders, bondholders and prospective acquirers of Chapter 11 debtors and other financially distressed companies. He also served as a member of Bear Stearns' Valuation Committee.
Mr. De Rose began his career as a corporate attorney at Wachtell, Lipton, Rosen & Katz. His responsibilities there included providing counsel to clients in M&A transactions and public and private securities offerings, as well as advising banks and institutional investors in connection with debt financings and troubled loan workouts.
Mr. De Rose earned a B.A. in philosophy from the University of Pennsylvania, a Ph.D. in philosophy from Brown University and a J.D. from the New York University School of Law. He is a member of the Association of the Bar of the City of New York, the American Bar Association and American Bankruptcy Institute. He is registered with FINRA as a General Securities Representative (Series 7 and 63) and a Limited Representative — Investment Banking (Series 79).
Sarah Downey is a co-leader of our Digital Asset Risk Transfer (DART) team, the Marsh
D&O Product Leader and a claims advocate for Marsh’s FINPRO Practice, our financial and
professional insurance group. She is located in our New York City office. As a DART team leader,
Sarah is focused on positioning Marsh as a trusted advisor, thought leader and solution
developer for insuring blockchain and digital asset companies and the risks they face. The DART team has successfully placed coverage for a number of blockchain companies including cryptocurrency exchanges, digital asset merchant banks, digital asset financial services advisors, blockchain technology incubators and others. As the Marsh D&O Product Leader, Sarah is responsible for developing and implementing Marsh’s strategy with respect to the D&O product overall and with regard to interaction with colleagues, clients and prospects. Sarah is also leading Marsh’s efforts in the creation and delivery of D&O content for internal and external distribution and often speaks externally on matters relevant to the D&O industry. In addition, Sarah leads the team responsible for interactions with Marsh’s D&O insurer trading partners with regard to coverage. In her role as a claims advocate, Sarah advocates for our client’s needs and works closely with our clients to help maximize their insurance recovery in connection with a claim. Sarah specializes in complex coverage and claims issues concerning directors and officers liability insurance.
Prior to joining Marsh in 2014, Sarah was an associate in the Directors & Officers Insurance Practice Group of White and Williams LLP, where she provided coverage and monitoring advice to foreign and domestic insurers and litigated coverage issues with respect to complex claims arising under directors and officers, errors and omissions, private equity, investment advisers, and employment practices liability policies. During her nine years as coverage counsel, Sarah advised insurers and corporate clients with respect to the interpretation of policy wording and counseled clients with respect to coverage recommendations and resolution strategies. Sarah also successfully represented insurer clients in coverage and bad faith litigation in a variety of state and federal court actions. Prior to joining White and Williams, Sarah was associated with the firms of Edwards, Angell, Palmer & Dodge LLP and Wilson, Elser, Moskowitz, Edelman & Dicker LLP.
• BA in psychology, Washington University in St. Louis
• JD, Fordham University School of Law
• Admitted to practice before the United States District Court for the Southern and Eastern Districts of New York and the United States District Court for the District of New Jersey
• Member of the Professional Liability Underwriting Society
• Member of the American Bar Association
Mr. Greene has over 35 years of experience in corporate finance, leading private equity, restructuring and advisory transactions and as an independent member and non-executive chair of public and private company boards of directors. Mr. Greene presently serves on the board of directors of Ambac Financial Group (AMBC), Element Fleet Management (EFN.TO), GP Natural Resources LLC (NRP) and USA Truck (USAK); is an independent member of investment, conflict and advisory committees for various private entities; and recently concluded service on several private company boards. Previously, Mr. Greene was a Managing Partner and Head of US Private Equity at Brookfield Asset Management, a global asset management company; a Managing Director and co-head of Carlyle Strategic Partners, a private equity fund; and a Managing Director of Wasserstein Perella & Co. and Whitman Heffernan Rhein & Co., Inc., independent investment banking firms. Mr. Greene is a volunteer firefighter and President of the Armonk Independent Fire Company. He is a graduate of The George Washington University.
Partner, Potter Anderson & Corroon LLPs Corporate Group
Mr. Shannon is former Chair of Potter Anderson & Corroon LLP’s Corporate Group and practices primarily in the areas of corporate and commercial litigation, including litigating stockholder class, derivative and other actions in the Delaware Court of Chancery. He also has significant experience in litigating and providing advice regarding various proceedings under the Delaware General Corporation Law, such as actions for appraisal, indemnification, and dissolution. Kevin has been involved in numerous cases involving partnerships, limited partnerships, and limited liability companies, and frequently counsels directors, stockholders, and other parties on their rights and obligations under Delaware law.
Prior to joining Potter Anderson & Corroon LLP, Kevin was a certified public accountant with Deloitte, and a financial officer with J.P. Morgan & Company. In light of his financial background, Kevin has been involved in many appraisal proceedings and other cases that address financial and accounting issues. He also has been involved in advising committees in connection with investigations of alleged improper conduct, including accounting irregularities.
ANDY STERN, a co-leader of, Sidley Austin LLP's, Securities and Shareholder Litigation team, focuses his practice on securities litigation and litigation relating to mergers and acquisitions, corporate governance issues and proxy contests. These matters frequently involve allegations of violations of the federal securities laws and common-law fiduciary duties, as well as claims of market manipulation and antitrust violations. He has tried cases in state courts and the federal district and bankruptcy courts, as well as in arbitration forums in more than 10 states.
Recent M&A-related matters include representation of:
• Fujifilm Holdings Corp. in successfully appealing preliminary injunction orders previously entered in connection with a merger transaction with Xerox Corp. and prosecuting a lawsuit against Xerox seeking more than $1 billion for breaching its obligations in connection with that transaction
• The independent directors of Kenneth Cole Productions in successful defense, including at the New York Court of Appeals, of class actions alleging breaches of fiduciary duties under New York law, arising from the transaction in which the company was taken private
• BW Group Limited in defeating motions for a preliminary injunction in New York and in the High Court of the Republic of the Marshall Islands relating to BW’s transaction with DHT Holdings and successfully defending BW’s right to acquire up to 45% of DHT
• The Yucaipa Companies and its affiliates and senior officers in obtaining dismissal of a putative class action in the Delaware Court of Chancery alleging breaches of fiduciary duties in connection with the merger of Morgans Hotel Group with SBE Entertainment Group
• The independent directors of Rouse Properties in obtaining dismissal of a putative class action in the Delaware Court of Chancery alleging breaches of fiduciary duties in connection with Rouse’s acquisition by Brookfield Properties
Such leadership on behalf of his clients has not gone unnoticed. Andy has been recognized in Chambers USA from 2014 to 2019 in Litigation: Securities where interviewees state that “he is incredibly strategic, extraordinarily knowledgeable in class actions and delivers excellent client service.” Benchmark Litigation has recognized Andy as a New York Local Litigation Star (2013–2020) and peers mentioned that Andy’s high-profile class action litigation appointments have led to him “making a name for himself” in that arena.