Michelle Reed Quoted in Agenda Magazine on Supreme Court’s Omnicare Case
Michelle Reed, a partner in Akin Gump’s litigation practice, was quoted in the Agenda magazine article “Shareholders Want to Sue Over ‘Beliefs’ Gone Wrong,” addressing the Supreme Court’s Omnicare case and the issues being raised by it. The case, which could clear the way for more shareholder litigation against public companies, asks whether issuers can be held liable for statements of belief expressed in a share offering that turn out to be incorrect, which is how the U.S. Court of Appeals for the 6th Circuit ruled.
Reed said, “Obviously when you state your opinion about things, you don’t have perfect foresight into the future,” and noted that even if the ruling from the 6th Circuit “was wrong in hindsight, [companies] could still be held liable, which is a dangerous position for issuers and their officers and directors.”
How the Supreme Court rules, Reed said, will determine what type of due diligence companies might have to do in the future: “It could be a costly question depending on how they define what a reasonable basis for a statement of opinion is.” She added, if there becomes a certain level of due diligence required for every reasonable statement of opinion, the cost of the due diligence process will go up.
To read more about the Omnicare case, please click here to view Reed’s post on the case on the AG Deal Diary blog.