Director & Officer Liability

As demonstrated by our lengthy and successful representation of the former outside directors of Enron, in over 100 cases and investigations following Enron’s collapse, Gibbs & Bruns’s lawyers have a well-established reputation in the area of director and officer (D&O) liability.  From matters involving alleged fraud, breach of fiduciary duty, insider trading, and options backdating to internal investigations, our clients trust us to steer them through the treacherous waters of parallel regulatory and civil litigation.

Former Outside Directors of Enron
From 2001 through 2007, we represented the Outside Directors of Enron’s Board in over 100 cases and related regulatory investigations that arose from Enron’s collapse.  We obtained the complete dismissal of all fraud claims by the federal class Plaintiffs.  Our clients testified multiple times to regulators, prosecutors, and investigators – but were always witnesses and never targets.  We are proud to say that none of our clients were ever charged with any criminal or regulatory violations of the securities laws despite the white-hot attention of the press and Congress.

During our representation of the Outside Directors of Enron’s Board, we handled groundbreaking litigation in the district court and the United States court of appeals concerning the interpleader of insurance policies.  We successfully established that our clients could exhaust the limits of the available insurance to settle claims against them, even though other claims (and criminal charges) remained outstanding against other insureds.  Both the district court and the Fifth Circuit held that the settlements could be funded.

Former Directors of Peregrine Systems, Inc.
We successfully represented certain former directors of Peregrine Systems in connection with state and federal litigation brought by former shareholders and a litigation trust formed in the bankruptcy of Peregrine Systems.  In the litigation trust action, the trust challenged over $500 million in stock sales by the Peregrine board, seeking treble damages of $1.5 billion under a California insider trading statute.  Following three hours of oral argument and months of motion consideration, the judge ruled in favor of our clients by dismissing all claims in the action.  The firm also succeeded in obtaining summary judgment on behalf of its client in related California state court investor litigation and successfully defended that ruling on appeal.

In Re Dynegy, Inc. Securities Litigation 
We represented one current and two former officers of Dynegy in the litigation following the financial setbacks experienced by that company.  Plaintiffs brought a variety of securities fraud claims against officers, directors, accountants, and banks. The firm obtained dismissals for all three of its clients.

Nabors Industries Ltd. Compensation Committee Members
We represented the majority of the compensation committee, including the chairman of the audit committee, during an internal investigation into allegations of options backdating at Nabors Industries Ltd.   We also represented the same directors in the class action filed in federal court in Houston, Texas involving the same allegations.  That suit was quickly resolved on very satisfactory terms involving no out-of-pocket payment from our clients.

Current and Former Directors of Crown Castle Corporation
We represent all of the current and former officers and directors of Crown Castle Corporation in the defense of a derivative suit filed in Houston, Texas involving allegations of options backdating.  We, along with counsel for the Company, were successful in having the trial court rule that the allegations regarding demand futility were insufficient to support a derivative suit.  Additionally, Plaintiffs sought to take discovery to find support for their allegations regarding demand futility.  The court of appeals overturned the trial court’s order allowing such discovery, and the Texas Supreme Court declined to hear the issue.  Following the appeal, the derivative Plaintiffs attempted to replead their case to which we, along with counsel for the Company, again asserted that the amended petition did not adequately plead demand futility.  The trial court has taken the latest motion under advisement.

Friede Goldman Halter, Inc.
We represented former directors of Halter Marine Group in a securities fraud matter arising out of the merger and subsequent bankruptcy of Friede Goldman and Halter Marine, two of the world’s largest ship and rig building companies at the time of the merger.  Plaintiffs alleged hundreds of millions of dollars in damages.  The matter was successfully resolved as part of a confidential settlement.