Friday, August 08, 2008

The Effect of the Proposed Amendment to FAS 5 on Mass Torts

We haven't yet said a peep about the FAS 5 brouhaha.

And, Lord knows, we haven't had to.

In a nutshell, the Financial Accounting Standards Board has proposed to amend FASB Statement No. 5 to require companies to make additional disclosures about pending "loss contingencies," which means making more public statements about pending litigation.

For some of the massive reaction to FASB's proposal, see The Wall Street Journal's editorial on August 7 or the D and O Diary or Point of Law's reaction (and links) on-line.

We won't pile on.

We'll do two other things instead.

First, here's a link to the web page on which FASB is posting all of the letters commenting on the proposed rule, so you have easy access to the primary sources.

Second, visitors to this blog will surely be interested in this one comment letter, submitted by six leading pharmaceutical companies -- Eli Lilly, Johnson & Johnson, Merck, Novartis, Pfizer, and Wyeth. The drug companies focus on the implications of the proposed amendment for disclosures relating to mass tort litigation. Along the way, the letter gathers in one place an awful lot of factual information about pharmaceutical mass torts that's ordinarily hard to come by. And, given the signatories to the letter, you're getting this information straight from the horse's mouth.

For those who defend mass torts for a living, the letter is well worth reading.

No comments: