Florida

Ron DeSantis’ Legal Threats Against Bud Light’s Parent Company are Dumb and Bad for Florida

Published

12 months ago

July 24, 2023

Florida Gov. Ron DeSantis’ odd threats to investigate and possibly sue Bud Light’s parent company on behalf of Florida’s pension fund are both confused and entirely meritless.

In a recent Fox News appearance, he claimed that his investigation could lead “to a derivative lawsuit filed on behalf of the shareholders of the Florida pension fund” to impose penalties on Bud Light for giving a transgender influencer a custom beer can.

As most Americans are not corporate lawyers, the ordinary person may not immediately smell the bull in DeSantis’ bluster. After all, Gov. DeSantis graduated from Harvard Law and knows enough to use the words “fiduciary” and “derivative.” Thankfully, corporate law has largely solved the problem of litigious and value-destroying shareholders like Gov. DeSantis.

Any large, publicly-traded corporation will have many shareholders with different views. Some of them, like Gov. DeSantis, will be armchair quarterbacks eager to attack corporate leaders for making a different decision than they would have. If shareholders could litigate every business decision that turned out to be unprofitable, large corporations could not function. Corporate leaders would become timid and afraid to take business risks lest some shareholder sue them.

To solve this problem, corporate law limits the ability of shareholders to litigate a corporation’s business decisions. The right to sue for harm to the corporation ordinarily belongs to the corporation, not to shareholders. A corporation’s board of directors decides how to manage a corporation’s affairs—including whether or not to file any lawsuits.

“For perspective, if Florida somehow won or settled the case for $50 million, which it will not, Florida’s pension fund would recover about 15 grand.”

A shareholder derivative lawsuit is an exception to this general rule. These lawsuits allow shareholders to assert claims that the existing board of directors should not manage on their own. Usually, shareholder derivative lawsuits involve claims against directors for somehow breaching their duties to the corporation. For example, a shareholder derivative lawsuit would be appropriate if a board of directors stole money from the corporation. As they are not likely to sue themselves, courts may permit shareholders to bring these claims against directors on the corporation’s behalf to recover the stolen funds.

American corporate law generally protects directors from being second guessed for their business decisions through the business judgment rule. Although states apply it in different ways, it generally means that courts will abstain from reviewing a corporation’s business decisions and presume that a corporation’s officers or directors acted in good faith unless some evidence exists that the board had some disabling conflict when making the decision at issue.

Gov. DeSantis’ proposed litigation against AB InBev, Bud Light’s parent company, appears entirely frivolous. It could expose Florida’s pension fund to sanctions and monetary penalties for bringing baseless litigation.

At the outset, a plaintiff filing a shareholder derivative lawsuit must name some defendants. Here, that would presumably be AB InBev’s board of directors. There is no evidence that AB InBev’s board approves every marketing decision for every brand within the corporation’s enormous portfolio. To make the claim work, Florida would have to argue that AB InBev’s board should have created some policy to ensure that brand managers discriminated against transgender persons when making marketing decisions.

If AB InBev had put this type of policy in place, it might have generated its own liability for discriminating on the basis of gender identity.

But the lawsuit is also dumb.

Functionally, Florida cannot litigate a shareholder derivative lawsuit “on behalf of the shareholders of the Florida pension fund” alone. In the highly unlikely event that Florida actually secured any recovery, it would be split between all of the shareholders because it would resolve a claim that belongs to the corporation. According to recent news reports, Florida’s pension fund owns approximately 682,000 out of a total of roughly 2,019,241,973 AB InBev shares.

This means that Florida’s pension would get about .03 percent of any recovery. For perspective, if Florida somehow won or settled the case for $50 million, which it will not, Florida’s pension fund would recover about 15 grand.

But there are many more reasons why this lawsuit lacks any merit. AB InBev is a Belgian corporation. This means that Belgian law governs shareholder disputes. Although I am not an expert on Belgian corporate law, I understand that an entirely different process exists to initiate shareholder derivative claims under Belgian law. Belgian law even imposes costs and damages on shareholders for filing frivolous derivative actions.

Functionally, this means that Florida’s highly unlikely upside for this sort of litigation is about 0.03 percent of any recovery. Its downside is likely millions in court costs, fees, and penalties for filing frivolous litigation.

If DeSantis files this derivative lawsuit, Bud Light’s parent company will open a can on him.

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Florida

Florida gas prices jumped 18 cents

Published

2 hours ago

July 8, 2024

Press Room

ORLANDO, Fla. – Fireworks were not the only thing going sky high last week. Florida gas prices shot up 18 cents per gallon in the days leading up to Independence Day, according to AAA.

AAA reported the state average price for gasoline as of Sunday was $3.51 per gallon. Florida drivers ended up paying an average of $3.53 on July 4. This was 27 cents more than last year’s holiday but just over a dollar less than the average price on the day in 2022.

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Officials stated the increase in price can be attributed to the traveling demand of the holiday weekend and the presence of the storm Beryl, which headed toward the Texas coastline over the weekend. The majority of Florida’s gasoline supply is sourced from transports that dock on the Gulf Coast and consequently sparked concern about the impact of the storm on oil supply.

“Florida drivers are now paying the most expensive gas prices in nearly two months,” Mark Jenkins, spokesman for AAA, said in a statement. “Fuel prices face continued upward pressure on concerns about Tropical Storm Beryl, and economic data suggesting that the U.S. Federal Reserve could lower interest rates to boost growth.”

The lowest metro market gas prices still remain in Crestview-Fort Walton Beach ($3.20), Pensacola ($3.22) and Panama City ($3.22), with the highest being in West Palm Beach-Boca Raton ($3.67), Naples ($3.58) and Homosassa Springs ($3.57).

To view state and local average gas prices, as well as anticipated costs, visit the AAA’s website. AAA also has a road trip calculator to help with your travel budget.

Ways to save on gasoline, according to AAA:

Combine errands to limit driving time.
Shop around for the best gas prices in your community.
Pay with cash. Some retailers charge extra per gallon for customers who pay with a credit card.
Remove excess weight in your vehicle. Every 100 pounds taken out of the vehicle improves fuel economy by 1-2 percent.
Drive conservatively. Aggressive acceleration and speeding reduce fuel economy.

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Florida

CFO Names Gallagher to Board of Florida Insurance Guaranty Association

Published

9 hours ago

July 8, 2024

Press Room

CFO Names Gallagher to Board of Florida Insurance Guaranty Association

Tom Gallagher, an éminence grise or elder statesman of the Florida property insurance world and current chief operating officer for People’s Trust Insurance Co., now has another job to put on his resumé: board member for the Florida Insurance Guaranty Association.

Florida’s chief financial officer, Jimmy Patronis, announced last week that he had appointed Gallagher to the FIGA Board of Directors, filling a vacancy left after a previous board member’s term had expired. The board now has seven members, and can have as many as nine.

Gallagher

FIGA, which handles claims left behind by insolvent insurers and must occasionally issue bonds and raise assessments on insurers to pay for those claims, has seen its oversight go through some significant changes in the last two months.

The executive director for the past two years, Corey Neal, stepped down in May to become executive vice president at SageSure. Four FIGA board members also left after their terms were completed, and four new members have now been appointed.

In a career that spans five decades, Gallagher, 80, has served as state treasurer, chief financial officer, insurance commissioner (1989 to 1995 and again from 2001 to 2003), and as a state legislator. He also was state education commissioner.

Gallagher helped start an insurance agency in 2008 and has been a consultant for Colodny Fass, a law firm that specializes in insurance litigation and regulation matters. He joined People’s Trust, based in Deerfield Beach in 2017, the company noted.

Patronis Names GEICO Claims Director to FIGA Board, Giving Board an Auto Insurance Rep

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Florida

Prediction: 3 Florida Gators Recruiting Prospects Announce Decisions Monday

Published

16 hours ago

July 7, 2024

Press Room

Prediction: 3 Florida Gators Recruiting Prospects Announce Decisions Monday

As the Florida Gators look to add to its 2025 class, two prospects will announce their commitments on Monday. Additionally, a 2024 basketball player turned offensive lineman will announce his decision on Monday as well.

With an announcement time at 3 p.m. EST, four-star safety Jaylan Morgan will choose between Florida, Georgia, Ole Miss and Mississippi State. As it stands, Morgan seems to be a heavy Georgia lean with multiple predictions from 247 Sports in favor of the Bulldogs.

Potentially losing Morgan right after losing four-star Hylton Stubbs to Miami will be a tough pill to swallow on the recruiting trail for the Gators. However, Florida is in a strong position for multiple defensive backs in the 2025 class.

Four-star safeties Lagonza Hayward, who will commit July 27, and Bryce Fitzgerald are still on the board as is four-star legacy corner Ben Hanks Jr.

Additionally, four-star tight end Andrew Olesh will announce his decision at 6 p.m. ET. He announced a top-four of Florida, Alabama, Penn State and Michigan on Sunday.

Once again, this doesn’t seem like an announcement that will go in the Gators’ favor with Michigan as the presumptive frontrunners. However, losing a battle for Olesh on the trail won’t be a massive loss for Florida, which currently has two tight end commits in the 2025 class.

The Gators currently hold pledges from three-star Micah Jones and four-star Tae’shaun Gelsey.

Finally, the third recruit to announce on Monday will be a 2024 enrollee. Offensive line project Jahzare Jackson, a former three-star basketball recruit who stands at a whopping 6 feet 9 inches, will announce Monday with Florida and Georgia as the leaders, he told Inside The Gators.

Prior to his visit with Florida, Jackson said the Gators were in the lead. He reiterated that on June 16 after leaving his visit.

“It’s a legit lead,” he said. “The people here, I was able to really connect with them, ask them some deep questions. What was it like last year to what it looks like this year. Definitely a lot of things I liked.”

Since then, the Bulldogs have shortened the gap and may have even overtaken the lead from the Gators, according to On3.

After what looked like what could be a strong July for the Gators, they have yet to earn a commitment during the early portion of the month with multiple targets either eliminating them or committing elsewhere. A commitment on Monday could go a long way to dictating how the rest of the summer goes.

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