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Delaware Supreme Court Wastes No Words: Summarily Affirms In re Volcano Corp. Stockholder Litigation, Upholding Business Judgment...

On February 9, 2017, the Supreme Court of Delaware summarily affirmed the Court of Chancery’s decision in In re Volcano Corp. Stockholder Litigation which had dismissed plaintiffs’ complaint on defendants’ 12(b)(6) motion to...more

Too Good to Be True: Fraudulent Self-Promotion Lands “Prodigy” in Hot Water with SEC

In June 2014, the Office of Investor Education and Advocacy at the Securities and Exchange Commission issued an alert cautioning that investment newsletters are often “used to carry out schemes designed to deceive investors.”...more

The SEC Audit Trail – Several Industry Groups See Problems as Currently Proposed

Last week, several securities industry groups filed critical responses to the SEC’s plan for an audit trail. While most groups that commented on the SEC’s proposed regulation supported implementing the proposal, several had...more

In a Case of First Impression, Delaware Chancery Court Holds It’s “Out with the Old (Board) and In With the New” When Considering...

On May 31, 2016, the Delaware Chancery Court rejected shareholders’ allegations of corporate wrongdoing in a derivative suit against a national healthcare company, Bioscrip, holding that Plaintiff failed to adequately allege...more

The Ripple Effects of U.S. v. Newman Continue: SEC Lifts Administrative Bar on Downstream Insider Trading Tippee and Tipper...

The ripple effects of the Second Circuit’s landmark insider trading decision, United States v. Newman, 773 F.3d 438 (2d Cir. 2014), were felt again last week. On Tuesday, February 23, 2016, the U.S. Securities and Exchange...more

But Everybody’s Doing It: Delaware Chancery Court Invalidates VAALCO’s “Wacky” Charter and Bylaws Provisions Despite Use by Other...

Ruling from the bench on dueling motions for summary judgment just days before a special meeting of shareholders was to be held, on December 21, 2015, Delaware Vice Chancellor J. Travis Laster invalidated certain provisions...more

The Boss Makes HOW much more than me? SEC Issues Final Pay Ratio Rule

On August 5, 2015, the Securities and Exchange Commission approved its final rule subjecting most public companies to the so-called “Pay Ratio Disclosure” mandated by the 2010 Dodd-Frank Wall Street Reform and Consumer...more

Wannabe Derivative Plaintiffs of Delaware Corporations Cannot Skirt Delaware Law By Filing Suit in California

It is well-established that a shareholder-plaintiff may not assert derivative claims against a corporation’s officers or directors unless he or she makes a pre-suit demand on the corporation’s board of directors and alleges...more

Oklahoma Takes a Stand a Stand in the Battle Over Derivative Fee-Shifting

Back in May we discussed ATP Tour, Inc. v. Deutscher Tennis Bund a seminal Delaware Supreme Court case that upheld a non-stock corporation’s “loser pays” fee-shifting bylaw. ATP Tour held that where a Delaware corporation...more

Does Being an ‘Expert’ Make You an Expert?

Earlier this month, Judge Victor Marrero of the Southern District of New York issued his opinion certifying a class of buyers of the common stock of a company created by a Chinese reverse merger. McIntire v. China...more

Delaware Supreme Court Tells Controlling Shareholders “If You Look Out For Your Minority, We’ll Look Out For You”

On March 14, 2014, the Delaware Supreme Court unanimously affirmed an important Delaware Court of Chancery decision issued in 2013 that offered a roadmap to companies and their directors on how to obtain the protections of...more

You Better Forum-Shop Around . . . While You Still Can

On January 31, 2014, Chevron Corporation moved to certify to the Delaware Supreme Court the question of whether exclusive forum bylaws are valid under Delaware law. Chevron filed its motion before the Honorable Jon S. Tigar...more

2/12/2014  /  Forum , Forum Selection , Forum Shopping

How Much Latitude Do Directors Have In Setting Executive Compensation?

Executive compensation decisions are core functions of a board of directors and, absent unusual circumstances, are protected by the business judgment rule. As Delaware courts have repeatedly recognized, the size and...more

When Are Directors Liable For Failing To Exercise Proper Oversight?

Recently we discussed whether directors of public companies face potential liability for not preventing cyber attacks. As we discussed, the answer is generally no, because absent allegations to show a director had a...more

Delaware Chancery Court Rulings Provide Insights On Reducing The Risk Of Successful Shareholder Challenges

Corporations contemplating going private should take note of recent rulings from the Delaware Court of Chancery, which provide clear guidance on how to structure their transactions to reduce the risk of being subjected to the...more

Shareholder Books And Records Requests To Become More Frequent, And More Potent

As we previously detailed, a shareholder’s request for corporate books and records can raise competing concerns for the company and its directors. ...more

Does A Board Need To Put A “For Sale” Sign On The Company When Considering A Change-Of-Control Transaction?

When a board of directors decides to enter the company into a change-of-control transaction, the board is charged with the duty to act reasonably to secure the best value reasonably attainable for its shareholders....more

Do A Deal And You’re Sure To Get Sued; Now, At Least, You Can Get Sued In Just One Place

These days almost every public company that announces an agreement to sell itself can expect to be the subject of multiple shareholder class actions challenging the transaction – even if shareholders will be receiving a...more

Do Directors Face Potential Liability For Not Preventing Cyber Attacks?

In the past weeks, we’ve reported that while most companies are properly disclosing their exposure to cybersecurity threats, the increasing occurrence and severity of cyber attacks has the SEC considering even more stringent...more

Going-Private Transaction With A Controlling Stockholder – What Standard Of Review Applies?

We previously discussed how important a special negotiating committee of independent directors can be when defending against stockholder challenges to change-of-control transactions – particularly for going private...more

What’s The Right Way To Respond To A Shareholder Books And Records Request?

Delaware law gives shareholders the right to request corporate books and records in order to investigate issues that are of interest to them. ...more

“We’re Considering Selling The Company – How Can A Special Committee Help?”

In any change-of-control business transaction, the decision by the target company’s board of directors to approve the deal is subject to heightened scrutiny by the courts. These days, virtually every M&A deal is sure to...more

What Makes A Director “Independent”?

What makes a director “independent”? That question is important, not only to investors who want to ensure that boards of directors exercise objective judgment on corporate affairs, but also to companies, who need assurance...more

5/3/2013  /  Directors , Nasdaq , NYSE , Shareholders

Purchase Timing A Wall To Facebook Derivative Litigation Despite Unenforceability Of Forum Selection Clause

Four derivative lawsuits against Facebook’s directors relating to alleged disclosure issues surrounding the company’s initial public offering have a new status: Dismissed. Last month, Judge Robert Sweet of the Southern...more

Shareholder Demands: Accepted, Refused Or Deferred? Let’s Ask RUSH.

When a shareholder makes a demand on a company to pursue litigation, the company’s board can look to generally well-developed law to determine how to evaluate the demand. Though there is no one particular procedure a board...more

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