Securities Class Actions Hold Despite Big Deals: Business of LawEllen Rosen
Deals often beget securities class actions. Yet, despite the active mergers-and-acquisitions market in 2014, the number of new federal securities class actions barely budged from the level in 2013.
Last year, 170 securities cases were filed, four more than in 2013. And that number was 10 percent below the historical average of 189 filings observed annually between 1997 and 2013, according to a new report by Cornerstone Research.
Additionally, the total maximum dollar loss for the filings last year was $215 billion, about one-third the historical annual average of $630 billion, and at the lowest level since 1997, Cornerstone found.
John Gould, the head of Cornerstone’s Boston office, said in an interview that “one out of every 28 public companies was subject to litigation last year.” While that number equates to 3.6 percent of all public companies, the likelihood of getting sued remains above the historical average. Yet, companies in the S&P 500 were less likely to face suits than in any year since 2000.
The good news for companies is that “more cases are getting dismissed and a lower percentage are going to trial,” Gould said.
Cornerstone also found that although there was little increase in the number of suits, “the size of filings measured by dollar losses decreased dramatically.”
Golf Caddies Say to PGA Tour: Pay Us to Wear Sponsor Bibs
Caddies for professional golfers including Greg Norman, Zack Johnson and the late Payne Stewart sued PGA Tour Inc. saying they are forced to wear endorsement bibs for corporate sponsors without pay, following college and professional athletes to the courts in a bid for ad dollars.
The caddies said the endorsements are worth $50 million a year, of which they get nothing, making them free billboards for sponsors in a sport that rakes in $1 billion annually.
Echoing claims by college athletes who successfully sued the National Collegiate Athletic Association to share in annual broadcast revenue, the caddies said they never consented to the commercial use of their images, which invariably include bibs festooned with corporate logos seen by huge television audiences.
College basketball players, cheerleaders for professional teams, retired football players and minor league baseball players have resorted to lawsuits in recent years. They contend sports leagues that earn billions of dollars violate labor and publicity rights laws by paying them low wages, or using their images without permission to profit from video game sales and television broadcasts.
The caddies, in a complaint filed Tuesday in federal court in San Francisco, sought a court order blocking the PGA Tour from making them wear bibs and requiring payment of royalties for use of their images.
Ty Votaw, a spokesman for the PGA Tour, declined to comment.
The case is Hicks v. PGA Tour Inc., 15-cv-00489, U.S. District Court, Northern District of California (San Francisco).
Davis Polk Hires Real Estate Lawyer in New York
Michael Rishty is joining Davis Polk & Wardwell LLP as a partner in its real estate group.
Rishty, previously a shareholder at Greenberg Traurig LLP, works on acquisitions, dispositions and development, joint ventures, financing on behalf of borrowers and lenders, debt restructuring and workouts, and leasing.
Davis Polk doesn’t hire many lateral partners. The last one was Neil MacBride a litigator who had served as the U.S. Attorney for the Eastern District of Virginia, Susan Peters, a firm spokeswoman, said in an e-mail.
Paul Weiss Adds Private-Equity Lawyer From Kirkland
Taurie Zeitzer has joined Paul, Weiss, Rifkind, Wharton & Garrison LLP as a partner in its corporate department in New York, where she will focus on private equity, M&A and complex corporate transactions. She was previously a partner at Kirkland & Ellis LLP, which she joined from Latham & Watkins in 2013.
Kramer Levin Adds Litigator From Paul Hastings in New York
Kramer Levin Naftalis & Frankel LLP has hired Daniel Goldman as a partner in its litigation department. Goldman has litigated securities, antitrust, merger and contract cases. He joins from Paul Hastings LLP, where he was a partner.
Goldman has tried numerous cases to verdict, both with juries and without, and handled arbitrations in California, Texas, Delaware, Washington and New York.
Manatt Expands with Peer-to-Peer Lending Lawyer
Manatt, Phelps & Phillips LLP has hired Brian Korn as a partner in the firm’s corporate and finance practice in New York. He joins from Pepper Hamilton LLP, where he founded and co-led the crowdfunding and peer-to-peer lending practice, the firm said in a statement.
Korn focuses on executing corporate finance transactions, including early stage and startup venture financings, initial public offerings and mature corporate and high-yield debt finance. He advises clients on broker-dealer compliance and corporate swap transactions.