News & Analysis as of

Bad Faith Breach of Duty

Washington Bad Faith Law At A Glance

by Sedgwick LLP on

In all insurance matters, all persons owe a duty of good faith, to abstain from deception, to practice honesty and equity, and to preserve inviolate the integrity of insurance. RCW 48.01.030; Appendix A. A cause of action...more

Court Of Chancery Explains When Side Deals Are Actionable Under A Bad Faith Theory

by Morris James LLP on

Kahn v. Stern, C.A. No. 12498-VCG (Aug. 28, 2017) - It is not easy to sufficiently plead a bad faith breach of fiduciary duty by a board in approving a merger when a majority of the directors were disinterested and...more

Delaware Chancery Court Dismisses Post-Closing Fiduciary Duty Claims, Finding The Complaint Failed To Plead Bad Faith

by Shearman & Sterling LLP on

On August 17, 2017, Chancellor Andre G. Bouchard of the Delaware Court of Chancery dismissed a shareholder suit asserting breach of fiduciary duty claims against the directors of MeadWestvaco Corporation (“MW”) in connection...more

Delaware Court Of Chancery Finds Demand Futility Where Plaintiff Adequately Alleged That Board's Approval Of Challenged...

by Shearman & Sterling LLP on

On August 1, 2017, Vice Chancellor Tamika Montgomery-Reeves of the Delaware Court of Chancery denied a motion to dismiss a stockholder complaint asserting claims for breach of fiduciary duty against directors and executives...more

The Supreme Court of Canada Clarifies the Personal Liability of Directors in Oppression Cases

by Bennett Jones LLP on

In Wilson v. Alharayeri, 2017 SCC 39 [Alharayeri], the Supreme Court of Canada in a unanimous decision provides significant guidance as to when directors ought to be held personally liable for oppressive conduct under the...more

Supreme Court of Canada reaffirms personal liability for directors in oppression actions

by Dentons on

On July 13, 2017, the Supreme Court of Canada (SCC) unanimously reaffirmed that a corporation’s directors may be personally liable in an oppression action, and set out the criteria for imposing personal liability. In Wilson...more

Inside the Courts – An Update From Skadden Securities - June 2017

This quarter’s issue includes summaries and associated court opinions of selected cases principally decided between February 2017 and April 2017. The cases address developing trends in class actions, ERISA, fiduciary duties,...more

Second Circuit Affirms Dismissal Of Shareholder Suit, Finding Subject Matter Jurisdiction Was Properly Exercised, Equity Dilution...

by Shearman & Sterling LLP on

On April 26, 2017, the United States Court of Appeals for the Second Circuit affirmed the dismissal of a lawsuit brought by a shareholder of Star Bulk Carriers Corp. (“Star Bulk”) against its directors and entities affiliated...more

Delaware Chancery Court Applies Corwin To Dismiss Post-Merger Fiduciary Duty Claim After Finding A Royalty Agreement Did Not...

by Shearman & Sterling LLP on

On April 13, 2017, Chancellor Andre G. Bouchard of the Delaware Court of Chancery dismissed a shareholder derivative suit alleging a breach of fiduciary duty against the directors of Paramount Gold and Silver Corp....more

"Delaware Supreme Court Addresses Limited Partnership Drop-Down Transactions and Conflicts Committees"

The Delaware Supreme Court recently ruled on two appeals from Court of Chancery decisions involving "conflicts committees" of Delaware limited partnerships. Both decisions arise out of challenges to "drop-down" transactions...more

Delaware Court of Chancery Dismisses Derivative Suits Alleging Directors Wrongfully Refused Litigation Demands

by Seyfarth Shaw LLP on

Seyfarth Synopsis: On November 30, 2016, The Delaware Court of Chancery dismissed two derivative suits filed on behalf of the Bank of New York Mellon (“BNYM”). The companion memorandum and letter opinions reaffirm the heavy...more

"Two Court of Chancery Deal Litigation Decisions Provide Helpful Guidance"

Chelsea Therapeutics: Post-Closing Bad Faith Claim a ‘Rare Bird’ in Delaware Absent Allegations of Self-Interestedness or Lack of Independence - In In re Chelsea Therapeutics International LTD Stockholders Litigation,...more

California Appellate Court Takes Equitable Subrogation to the Excess

by Carlton Fields on

In California, where a primary insurer is found to have unreasonably failed to settle within its policy limits, and a judgment is later entered against their insured in excess of those limits, the primary carrier can be...more

Avoiding Lender Liability for Credit-Related Actions in California

by Snell & Wilmer on

Aside from general statutory prohibitions on lender discrimination, there are certain circumstances under California law in which lenders may be held liable for credit-related actions, such as negotiating or denying credit....more

How Appraisal Protects Against Texas Insurance Code Abuse

by Zelle LLP on

Insurance practice in Texas has become somewhat rote. Typically, a petition is filed against both an insurance company (that is often not based or incorporated in Texas) and a local adjuster. In addition to a breach of...more

Trust Instrument Can’t Completely Insulate Trustee From Liability

by Bryan Cave on

Settlors often want to give their trustees peace of mind that they can administer the trust without a court looking over their shoulder and second-guessing every act they take. So, estate planners will often put a broad...more

Wisconsin Supreme Court Reaffirms Four-Corners Rule for Insurers’ Duty to Defend

by Foley & Lardner LLP on

An insurer’s decision whether to defend a lawsuit against its insured can be a critical issue involving tens of thousands, if not millions, of dollars for Wisconsin companies who are sued. The Wisconsin Supreme Court recently...more

Delaware Law Updates – The Duty of Loyalty: Anything But ‘Hazy Jurisprudence’ on an Exacting, But Narrow, Standard

by McCarter & English, LLP on

In a recent decision out of the Delaware Court of Chancery—In re Chelsea Therapeutics International Ltd. Stockholders Litigation., Consol. C.A. No. 9640-VCG—Vice Chancellor Glasscock was faced with a claim that the board of...more

Court Orders Cigna to Pay Out-of-Network Surgical Claims

by King & Spalding on

On June 1, 2016, the United States District Court for the Southern District of Texas ordered Cigna to pay nearly $13.7 million to Humble Surgical Hospital, LLC (“Humble”). Of the nearly $13.7 million, almost $11.4 million...more

Disregard of Speculative Financial Projections Was Not Bad Faith

by Morris James LLP on

In a stockholder challenge to a sale of the company, a plaintiff may rebut the business judgment rule by pleading facts that support a reasonable inference that at least half of the directors, who approved the sale, were not...more

Case Reminds Insurance Agents to Review Process of Receiving Approval from Insureds Before Submitting Applications to Carriers

by Hinshaw & Culbertson LLP on

Schmidt v. Indiana Insurance Co., No. 22S01-1507-PL-412, Supreme Court of Indiana, December 2, 2015 - Plaintiff was the owner of a house in which he allowed his cousin to live from 2007 to 2009. When the cousin moved...more

Delaware Chancery Court Dismisses Challenge to MLP Drop Down Transaction

by Bracewell LLP on

The Delaware Chancery Court recently dismissed a challenge to a transaction in which a master limited partnership (the "MLP") repurchased an interest in a crude oil pipeline in 2015 previously sold to its general partner (the...more

N.Y. Court of Appeals Adopts Business Judgment Rule, with Conditions, for Going-Private Mergers

The New York Court of Appeals has followed Delaware in holding that the business-judgment rule applies to going-private mergers as long as certain shareholder-protective measures are met. The court’s May 5, 2016 decision in...more

Policyholder’s Bad Faith Claim Against Cyber-Insurer Survives Summary Judgment

In follow up on an older entry, the Court in Travelers Prop. Cas. Co. of Am. V. Fed. Recovery Servs., recently issued another order granting partial summary judgment in favor of a cyber-insurer, but also allowed the bad faith...more

Insurance Recovery Law - January 2016

Despite Finding Policy Application Misrepresentation, Jury Rules Against Policy Rescission - Why it matters: A federal jury concluded that Starr Surplus Lines Insurance Company did not have a valid basis to rescind the...more

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Cybersecurity

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