Business Organization › Business Torts › Civil Remedies

Unsuccessful Lawsuit By Condo Owner - The Cost Implications

In a previous blog, we reported on a case, Harvey v. Elgin Condominium Corporation No. 3, where an unhappy unit owner sued the Corporation for various alleged infractions relating to the replacement of existing wooden decks,...more

VERONICA GUTIERREZ, ERIN WALKER, and WILLIAM SMITH v WELLS FARGO BANK N.A.

CLASS ACTION FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER BENCH TRIAL AWARDING $203 MILLION TO WELLS FARGO'S CALIFORNIA CUSTOMERS

CLASS ACTION FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER BENCH TRIAL AWARDING $203 MILLION TO WELLS FARGO'S CALIFORNIA CUSTOMERS. A California judge ordered Wells Fargo to pay California customers $203 after finding that...more

News Of The (Shareholder Derivative) World: Record-High $139 Million Settlement In News Corp. Phone Hacking Suit

Putting an end to shareholder derivative litigation arising from News Corp.’s phone-hacking scandal, the company’s directors agreed last week to a record-breaking $139 million cash settlement. According to the plaintiffs’...more

National Consumer Law Center Re: Restoring the Wisdom of the Common Law: Applying the Historical Rule Against Contractual Penalty...

NATIONAL CONSUMER LAW CENTER (NCLS) Banks Raking In Billions In Profits From Overdraft Fees The notion behind an overdraft fee — in which a bank customer is charged a penalty for overdrafting his account — is twofold:...more

Don’t Lie About Assets Under Management

Umesh Tandon, president, chief compliance officer, and sole owner of Simran Capital Management, recently agreed to a settlement with the SEC relating to alleged violations of the Investment Advisers Act of 1940 and the...more

Franchising in Alberta -- April 2013: Fabutan: Renewal, Termination and the Duty of Good Faith

Fabutan: Renewal, Termination and the Duty of Good Faith - Background to the Dispute: Against the backdrop of a bitter family dispute, the Fabutan decision1 reinforces the maxim that business and family often do...more

Kallick v. SandRidge Energy, Inc., C.A. No. 8182-CS (Del. Ch. Mar. 8, 2013) (Strine, C.)

In this opinion, the Court of Chancery granted a stockholder of SandRidge Energy, Inc. (“SandRidge” or the “Company”) injunctive relief after concluding that defendant-directors of SandRidge likely violated their fiduciary...more

In re PAETEC Holding Corp. S'holders Litig., C.A. No. 6761-VCG (Del. Ch. Mar. 19, 2013) (Glasscock, V.C.)

In this letter opinion, the Court of Chancery awarded attorneys’ fees and costs to plaintiffs’ counsel of $500,000 after analyzing plaintiffs’ unopposed fee request under the relevant Sugarland factors, and determining that...more

The Unintentional Business Partnership & Liability For New Post-Dissolution Obligations

This week we examine the unintentional creation of business partnerships, liability for obligations incurred after dissolution of a partnership, and take a look at partnership by estoppel. This is done through the context of...more

Maryland's appellate courts preserve the corporate shield against efforts to pierce the corporate veil

Maryland remains one of the toughest jurisdictions for plaintiffs seeking to pierce the corporate veil and impose personal liability on corporate owners for contract debts. Maryland has long recognized an equitable claim to...more

Freedman v. Adams, et al., C.A. No. 4199 (Del. Jan. 14, 2013)

In this en banc opinion, the Delaware Supreme Court affirmed the Court of Chancery’s decision in Freedman v. Adams, et al., C.A. No. 4199-VCN (Del. Ch. Mar. 30, 2012), denying the plaintiff’s motion for an award of attorney’s...more

Miller v. Palladium Industries, Inc., C.A. No. 7475-VCN (Del. Ch. Dec. 31, 2012) (Noble, V.C.)

In this letter opinion, the Court of Chancery granted the defendant-corporation’s motion for judgment on the pleadings, and dismissed the plaintiff’s action brought under 8 Del. C. § 145(e) for advancement of legal fees and...more

In re Celera Corp. S’holder Litig., No. 212, 2012 (Del. Dec. 27, 2012)

In this en banc decision, the Delaware Supreme Court affirmed the Court of Chancery’s certification of a class representative in a breach of fiduciary duty action, even though the class representative sold its stock in the...more

NJ Appellate Division Decision Highlights Gaps in Existing LLC Law in New Jersey and Importance of Having an Operating Agreement

In my prior blogs I’ve addressed the importance of having an operating agreement for any business owner operating as a limited liability company (“LLC”), and have also covered the recent legislative changes in New Jersey with...more

Texas Court Rules that Regardless of Fault, CEOs and CFOs Will Have to Pay Up Under Sarbanes-Oxley Section 304

A Texas federal judge denied defendants ArthoCare CEO Michael A. Baker and CFO Michael T. Gluk’s motion to dismiss the SEC’s claim against them under Sarbanes-Oxley (“SOX”) Section 304’s clawback provision. Section 304...more

Santa Clara Superior Court Says Post-Closing Damages Claims Are Derivative, Not Direct

Last Friday, Judge Kleinberg of the California Superior Court, County of Santa Clara, dismissed two shareholder class actions against the former directors of Actel Corporation and Applied Signal Technology, Inc. for breach of...more

Shocking Technologies, Inc. v. Michael, C.A. No. 7164-VCN (Del. Ch. Oct. 1, 2012) (Noble, V.C.)

In this memorandum opinion, the Delaware Court of Chancery found defendant Simon J. Michael (“Michael”), a director of plaintiff Shocking Technologies, Inc. (“Shocking” or the “Company”), breached his fiduciary duty of...more

Ontario Court Denies Advance on Former Directors’ Legal Costs – Makes Rare Interim Finding of Bad Faith

The Ontario commercial court recently decided that a corporation did not have to advance legal fees to the former directors and officers that it had sued, notwithstanding the fact that the corporation’s by-law mandated the...more

What To Do If Your Business Gets Sued: A Litigation Primer for the Litigation Wary

Whether you are a small business or a large financial institution, the threat of a civil lawsuit being filed is always a possibility and becoming another regular cost of doing business. Although lawsuits are filed for any...more

Delaware Supreme Court Weighs In On Methodology for Attorneys’ Fees Award in Shareholder Derivative Litigation

On Monday, the Delaware Supreme Court affirmed a $2 billion judgment by Delaware Chancellor Strine in the Grupo Mexico/Southern Peru shareholder derivative litigation. The Supreme Court also affirmed Chancellor Strine’s...more

Second Circuit Revives Securities Fraud Class Action, Finding Economic Loss Where Stock Price Rebounds Soon After Fraud Is...

Imagine a plaintiff who buys stock in a company that subsequently discloses a misstatement in its financial statements that existed at the time plaintiff invested. The stock price drops upon the initial disclosure, and then...more

Majority Shareholders Who Take Part in "Squeeze-Outs" Can No Longer Count Pennsylvania as the Sanctuary It Once Was Thought to Be

Standard learning has long held that a minority shareholder of a Pennsylvania corporation who was deprived of his stock by a “cash-out” or “squeeze-out” merger had no remedy after the merger was completed other than to take...more

Defending Michigan Shareholder Oppression and Member Oppression Claims in Closely Held Companies

Closely held businesses are frequently co-owned by friends and relatives, and are governed in a friendly, informal style. This can work well until it doesn't. Changes in ownership or control through divorce, inheritance and...more

Insider Trading California Style

In this recent post, Professor Stephen Bainbridge noted that the attorneys defending former hedge fund manager Doug Whitman have argued for the application of California law with respect to fiduciary duties. He cites this...more

Condo Directors Held Personally Liable for Legal Costs - A Follow-up

In response to our recent post on the case of Boily v. Carleton Condominium Corp. No. 145, where board directors were held by a court to be personally responsible for legal costs incurred by a group of owners, one of our...more