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Del. Chancery Criticizes Bankers Again in Rural Metro; Undisclosed Conflicts Can Make Sale Process Unreasonable

What you need to know: A recent Delaware Chancery Court decision reinforced the premise that directors of Delaware corporations will be held culpable if they conduct an M&A process based on inadequate information...more

Who’s in Charge – Is the Board Responsible to Monitor Its Financial Advisor or Vice Versa?

In the case of In re Rural Metro Corporation Stockholders Litigation, the Court of Chancery of the State of Delaware held that the primary financial advisor retained by Rural/Metro Corporation aided and abetted the board in...more

Financial Advisor Liable for Aiding and Abetting Buyout Target Board’s Breach of Fiduciary Duty

On March 7, the Delaware Court of Chancery published a post-trial opinion in In Re Rural Metro Corporation Stockholders Litigation (Rural Metro) finding Rural/Metro’s financial advisor RBC liable for aiding and abetting the...more

Orrick's Financial Industry Week in Review - February 10, 2014

No-Action Letter Provides Relief to M&A Brokers - On January 31, in a significant no-action letter (Letter), the Staff of the Division of Trading and Markets provided assurances that it would not recommend enforcement...more

Corporate and Financial Weekly Digest - Volume IX, Issue 5

In this issue: - FTC Announces New Filing Thresholds for Hart-Scott-Rodino Pre-Merger Notifications - SEC Division of Corporation Finance Issues Three C&DIs Relating to “Unbundling Rule” - NFA Members...more

Inside The Courts - December 2013 | Volume 5 | Issue 4

In This Issue: *U.S. SUPREME COURT: - Halliburton Co. v. Erica P. John Fund, Inc., No. 13-317 (U.S. Nov. 15, 2013) Lawson v. FMR LLC, No. 12-3 (U.S. Nov. 12, 2013) - Chadbourne & Parke LLP v. Troice, No....more

Corporate and Financial Weekly Digest - October 11, 2013

In this issue: - SEC Launches Public Website for Analyzing Exchange Data - New York Stock Exchange Proposes New Rules to Harmonize Quantitative Continued Listing Standards and Modify Reverse Merger Listing...more

DiRienzo v. Lichtenstein, et al., C.A. No. 7094-VCP (Del. Ch. Sept. 30, 2013) (Parsons, V.C.)

In this lengthy memorandum opinion, the Court of Chancery dismissed claims relating to a series of complex transactions in which a hedge fund, previously organized as a private limited partnership, was converted by its...more

"The SEC’s Renewed Scrutiny on Accounting Cases: Expected Focus Areas and How Companies Can Prepare"

The U.S. Securities and Exchange Commission (SEC or Commission) has announced plans to reinvigorate its enforcement efforts with respect to accounting issues. These plans include adding dedicated personnel and using data...more

Delaware Court Issues Important Trados Decision Delineating Director Duties in Sale of Venture-Backed Company

The Delaware Chancery Court issued its long-awaited post-trial decision last month in In re Trados Incorporated Shareholder Litigation. In the decision, the court affirmed that directors designated by the venture capital...more

Bill on Bankruptcy: Detroit Judge Might Lose Grip on the Case  [Video]

Sept. 12 (Bloomberg) -- The possibility that the most significant decisions affecting Detroit will not be made in bankruptcy court elevates the motor city to the "Case of the Week" status on the bankruptcy video with...more

Grove v. Brown, C.A. No. 6793-VCG (Del. Ch. Aug. 8, 2013) (Glasscock, V.C.)

In this memorandum opinion, the Court of Chancery, relying on the unambiguous terms of a limited liability company operating agreement, found that a member’s failure to make an initial capital contribution to a limited...more

Trados: Four Key Takeaways for Boards & Investors

As we mentioned in this post earlier this month, the Delaware Court of Chancery has issued its decision in the matter of In re Trados Incorporated Shareholder Litigation, C.A. No. 1512-VC (August 16, 2013), in which it...more

In re MFW Shareholders Litigation: Controlling Shareholder in Going-Private Transaction May Gain the Benefit of the Business...

In a decision with great potential significance for the structuring of going-private transactions, Delaware Chancellor Leo Strine recently held in In re MFW Shareholders Litigation that a merger with a controlling stockholder...more

Another Federal Judge Spurns Application Of The Business Judgment Rule To Officers

Last week, I covered the choice of law issue in FDIC v. Faigin, 2013 U.S. Dist. LEXIS 94899 (C.D. Cal. July 8, 2013) and promised more, When The Parent Is A Blue Hen And The Subsidiary Is A 49er, What Law Governs?...more

Carsanaro, et al. v. Bloodhound Tech., Inc. et al., C.A. No. 7301-VCL (Del. Ch. Mar. 15, 2013) (Laster, V.C.)

In this Opinion, the Court of Chancery denied, in large part, defendants’ motion to dismiss plaintiffs’ claims challenging several allegedly self-interested and dilutive transactions....more

Restatements Resurrected?: Accounting Fraud By The Numbers

Several months ago, I raised the question of why the large-scale accounting fraud cases of the type that had been so prevalent in the early 2000s were no longer a staple for either federal prosecutors or the SEC. In so doing,...more

In re Diamond Foods, Inc. Derivative Litig., C.A. No. 7657-CS (Del. Ch. Feb. 28, 2013)

In this memorandum opinion, the Court of Chancery granted defendants’ motion to dismiss the plaintiffs’ breach of fiduciary duty claims. Defendant Diamond Foods, Inc. (“Diamond”) was planning a December 2011 merger...more

Legal Focus – USA: M&A Litigation

According to recent research by Cornerstone, 9 out of 10 mergers in 2010 and 2011 with a value of more than $100 million involved some form of dispute amongst the shareholders. Originally published in Lawyer Monthly...more

Financial Advisor Conflicts Update

Recently, the Delaware Court of Chancery has examined financial advisor conflicts in the mergers and acquisitions context and emphasized in various opinions that although financial advisors play a valuable role,...more

Letters of Intent: Creating Inadvertent Obligations

Parties have long used letters of intent, term sheets and memorandums of understanding (otherwise known as “LOIs”) to express a preliminary interest in a transaction and to outline the general business terms of...more

The Del Monte Decision: Court Finds Likely Breach of Fiduciary Duties by Board Arising from Actions by Financial Advisor;...

In litigation over the $5.3 billion LBO of Del Monte Foods Company, the Delaware chancery court postponed for 20 days the shareholder vote on the buyout and prohibited the sponsor group during the postponement from exercising...more

In re Del Monte Foods Company Shareholders Litigation

Sell-Side Advisor Conduct Prompts Delaware Court to Enjoin Merger Vote and Deal Protections in Del Monte Buyout In a move that further limits the actions of investment banks to pair buyers and sellers in acquisition...more

Investigation Report

When investigating a reverse merger between foreign and U.S. shell companies, make certain that the U.S. shell is clean in every way. This redacted investigation report documents a fraudulent reverse merger scheme wherein a...more

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