It’s never fun to consider litigation, especially when you’re thinking of an initial public offering. But Heidi Lawson and Elizabeth Kurpis of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo remind companies that there’s a good chance the fallout from an unsuccessful IPO can affect not only the company, but its officers and directors. “Furthermore, depending upon the severity of any given problem that could arise, an unsuccessful IPO could also draw the attention of securities regulators,” they say. The best line of defense besides vigilance of course? Insurance.
“Due to the possible liabilities that may stem from an IPO, it is important that D&O policy considerations do not fall to the bottom of the priority list when planning for an IPO,” say Lawson and Kurpis. Though reading through insurance policies is as much fun as waiting in a Las Vegas airport all night alone (OK, maybe waiting at McCarran International is slightly more fun if you have an iPhone and a Celine Dion soundtrack, not to mention a vivid imagination), the authors have some tips about what to look for in coverage.
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