Not exactly Earth-shattering news, but Judge Cavanaugh has -- just this week -- consolidated the various Merck versions of the ENHANCE Vytorin/Zetia securities fraud putative class actions, under the 08-2177 action number, and caption-name (click it -- to enlarge to fully readable-size). Note also that CEO Dick Clark has been sued, for personal liability, in these suits. But do not weep prematurely for him (or Fred Hassan, Carrie Cox, Hans Becherer, et al. -- in the Schering-Plough versions of these suits). Why?
Assuming each acted with due care (or at least, without gross negligence, or intentional malfeasance), and in good faith (typically by relying on experts), each of their personal costs and expenses, including separate counsel, if need be, will be covered by applicable officer and director insurance policies, during the pendancy of the litigation.
If any of these folks are found to have acted in bad faith, or in a grossly-negligent fashion, the above D & O insurance becomes unavailable to cover any actual damages awarded (and they'll owe the companies for the lawyers' fees). In that case, they'll need to sell their second (or third, fourth or fifth!) homes -- to cover it.
Saturday, October 25, 2008
Posted by condor at 5:39 AM