Securities Mergers & Acquisitions Business Torts

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Delaware Supreme Court Holds That a Stockholder Plaintiff Must Plead a Non-Exculpated Claim to Avoid Section 102(b)(7)-Based...

In the consolidated appeal In re Cornerstone Therapeutics Inc., Stockholder Litigation and In re Zhongpin Stockholders Litigation, Nos. 564, 2014 and 706, 2014, 2015 Del. LEXIS 231 (Del. May 14, 2015), the Delaware Supreme...more

Important Delaware Supreme Court ruling on use of charter provision to seek preliminary dismissal – 3 key takeaways

In a decision jointly resolving two appeals - In re Cornerstone Therapeutics Inc. Stockholder Litigation and Leal v. Meeks - the Delaware Supreme Court clarified seemingly conflicting Delaware case law. The decision sought to...more

CLIENT ALERT: Delaware Supreme Court Establishes Rule Permitting Dismissal of Independent Directors From Entire Fairness Suits

In re Cornerstone Therapeutics Inc. S’holder Litig., No. 564, 2014 (Del. May 14, 2015) & Leal v. Meeks, No. 706, 2014 (Del. May 14, 2015) In these interlocutory appeals, the Delaware Supreme Court resolved a...more

Southeastern Pennsylvania Transportation Authority, v. AbbVie, Inc., CA No. 10374-VCG and Rizzolo v. AbbVie Inc., CA No. 10408-VCG...

In this memorandum opinion, the Court of Chancery denied two stockholders’ request for the inspection of books and records of a company pursuant to 8 Del. C. § 220, finding that the stockholders failed to show a credible...more

M&A Update: Delaware Supreme Court Issues Important Ruling Protecting Independent Directors

On May 14, 2015, the Delaware Supreme Court ruled that claims against independent directors must be dismissed when a company charter provision shields directors from monetary liability for breach of the duty of care and the...more

SDNY Denies Motion to Dismiss SEC Insider Trading Complaint Despite Newman Holding

The US District Court for the Southern District of New York recently denied two defendants’ motion to dismiss a Securities and Exchange Commission complaint alleging that they committed insider trading, holding that the...more

Fortis Advisors LLC v. Dialog Semiconductor PLC, C.A. No. 9522-CB (Del. Ch. Jan. 30, 2015) (Bouchard, C.)

In this memorandum opinion, the Court of Chancery granted a motion to dismiss certain claims relating to a dispute over earn-out payments owed to the former equity holders of iWatt, Inc. (“iWatt”) following the sale of iWatt...more

Virtus Capital L.P. v. Eastman Chemical Co. et al., C.A. No. 9808-VCL (Del. Ch. Feb. 11, 2015) (Laster, V.C.)

In this decision, the Court of Chancery denied a motion to dismiss for lack of personal jurisdiction brought by an individual that controlled the majority stockholders of a Delaware corporation, holding that the complaint...more

Inside The Courts - March 2015 | Volume 7 | Issue 1

In This Issue: - U.S. SUPREME COURT: ..Gelboim v. Bank of Am. Corp., No. 13-1174 (U.S. Jan. 21, 2015) - DEMAND FUTILITY: ..Arduini v. Hart, No. 12-15750 (9th Cir. Dec. 17, 2014) - EXCHANGE...more

How Recent Fiduciary Duty Cases Affect Advice To Directors And Officers Of Delaware And Texas Corporations

The conduct of corporate directors and officers is subject to particular scrutiny in the context of business combinations (whether friendly or hostile), executive compensation and other affiliated party transactions,...more

Is It Worth It For Plaintiffs' Counsel To Gamble On Merger Class Actions in North Carolina?

I hadn't written anything yet about the multiple shareholder actions challenging the merger of PokerTek -- a developer and distributor of electronic table (gambling) games -- with Multimedia Games -- another developer and...more

In re Family Dollar Stores, Inc.: No Revlon Duty to Seek Better Terms From Competing Bidder

Last month, in In re: Family Dollar Stores, Inc. Stockholder Litigation, a Delaware Chancery judge rejected the efforts of certain shareholders of Family Dollar Stores, Inc., to prevent Family Tree’s shareholders from voting...more

Forum Selection Bylaws Gain Additional Support in California

In adopting an exclusive forum selection bylaw, companies can avoid the cost and complication of multi-forum litigation after an M&A transaction. In response to the wasteful and burdensome trend of multi-forum...more

No Auction Required – Delaware Supreme Court Affirms Board Flexibility under Revlon

Ruling that an active solicitation process is not necessarily required for a target board of directors to satisfy its fiduciary duties in a change of control transaction, the Delaware Supreme Court overturned a preliminary...more

In re Novell, Inc. S’holder Litig., C.A. No. 6032 (Del. Ch. Nov. 25, 2014) (Noble, V.C.)

In this memorandum opinion, the Court of Chancery granted summary judgment in favor of defendants on claims alleging that directors acted in bad faith by favoring a bidder in a sale process for reasons other than the pursuit...more

Court Clarifies Law on Enforceability of Obligations of Non-Signatories in Private Mergers

In a fact-specific case with potential ramifications for future mergers under Delaware law, Cigna Health and Life Insurance Co., a preferred stockholder of Audax Health Solutions Inc., whose shares were extinguished by a...more

Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLLP, C.A. No. 7906 (Del. Ch. Nov. 26, 2014) (Glasscock, V.C.)

In this memorandum opinion, the Court of Chancery largely denied but granted in part defendants’ motion to dismiss claims relating to a 2011 merger in which plaintiffs Great Hill Equity Partners IV, LP and related entities...more

Information Letter: Management Liability: Potential Risk Zones (Russia)

The recent court practice shows that lawsuits seeking compensation of damages caused to company by its management are being filed with increasing frequency. It is largely due to courts' departure from formalistic approach to...more

Delaware Court Provides Guidance on Acceptable Deal Protection Mechanisms and Scope of Third Party Aiding and Abetting Liability...

On November 25, 2014, the Delaware Court of Chancery issued a decision in In Re Comverge, Inc. Shareholders Litigation, which: (1) dismissed claims that the Comverge board of directors conducted a flawed sales process and...more

Delaware Court of Chancery Applies Business Judgment Rule to Directors Who Approve Merger Supported by Large Shareholders

In its October 24, 2014, decision in In re Crimson Exploration Inc. Stockholder Litigation, C.A. No. 8541, the Delaware Court of Chancery confirmed that the business judgment rule is applicable in evaluating claims for breach...more

In re KKR Financial Holdings LLC S'holder Litig., Consol. C.A. No. 9210-CB (Del. Ch. Oct. 14, 2014) (Bouchard, C.)

In this opinion, the Court of Chancery dismissed a purported class action by stockholders of KKR Financial Holdings LLC (“KFN”) challenging its acquisition by KKR & Co. L.P. (“KKR”) in a stock-for-stock merger, rejecting...more

Delaware Court of Chancery Rejects Controlling Stockholder Claims and Applies Business Judgment Rule to Merger Suits

In In re KKR Financial Holdings LLC Shareholder Litigation, C.A. No. 9210 (Del. Ch. Oct. 14, 2014), the Delaware Court of Chancery dismissed a shareholder derivative suit brought by shareholders of KKR Financial Holdings LLC...more

Delaware Court Confirms Applicability of Business Judgment Rule to Investment Decisions of Insolvent Corporations

In its October 1, 2014 decision in Quadrant Structured Prods. Co. v. Vertin, et al., C.A. No. 6990, the Delaware Court of Chancery applied the protections afforded under the business judgment rule to investment strategies...more

In re Cornerstone Therapeutics Inc. S'holder Litig., Consol. C.A. No. 8922-VCG (Del. Ch. Sept. 10, 2014) (Glasscock, V.C.)

In this opinion on a motion to dismiss, the Court of Chancery held that, in a controller transaction governed by entire fairness review, a plaintiff need not specifically plead non-exculpated breaches of duty as to...more

Forum Selection Bylaws–More Good News

Fending off merger-related shareholder lawsuits keeps getting easier. Just a week ago, the Delaware Chancery Court upheld the enforceability of the bylaw of a Delaware corporation headquartered in North Carolina that selected...more

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