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Bad Faith Breach of Duty Board of Directors

BCLP

Recent Delaware cases clarify Caremark oversight duties for directors and executive officers

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A claim for breach of the duty of oversight is known as a Caremark claim, after the landmark Delaware Court of Chancery decision in In re Caremark International Inc. Derivative Litigation (1996). Since then, Delaware courts...more

Paul Hastings LLP

Delaware Court of Chancery Dismisses Duty of Oversight and Care Claims Against Directors

Paul Hastings LLP on

In our February 14, 2023 Stay Current, we discussed a Delaware Court of Chancery decision allowing shareholder derivative claims to proceed against a corporate officer for alleged oversight duty failures stemming from...more

Fisher Phillips

Red Flags Mean Danger! 6 Key Steps for Businesses as Delaware Expands Fiduciary Liability for Corporate Officers

Fisher Phillips on

Human Resources Executives and Chief Compliance Officers now face the potential for increased personal liability following a first-of-its-kind decision from a Delaware court, which established the fiduciary duty of oversight...more

Goodwin

Delaware Court of Chancery Declines to Dismiss Investment Firm from Stockholder Derivative Suit

Goodwin on

Delaware Court of Chancery Declines to Dismiss Investment Firm from Stockholder Derivative Suit; Delaware Chancery Court Dismisses Majority of Claims Alleging that California Biotech Firm Profited from Nonpublic Information...more

Cooley LLP

Blog: Pleading Bad Faith Against Special Committee Members: A New Trend?

Cooley LLP on

Special committees, by design, are created to address conflicts and to insulate the board of directors from liability for the very conflicts that may invite judicial scrutiny of the fairness of the board’s decision. A...more

Foley & Lardner LLP

Health Care Provider Director and Officer Liability: Important Takeaways from Clovis and Marchand

Foley & Lardner LLP on

Health care provider boards of directors have been put on notice—given these two recent Delaware court decisions - Clovis and Marchand—that courts may be willing to significantly extend a corporate board’s Caremark duty to...more

Foley & Lardner LLP

INSIGHT: New Corporate Board Procedures Advisable to Satisfy Duty of Oversight

Foley & Lardner LLP on

In Marchand v. Barnhill, a unanimous Delaware Supreme Court imposed substantial new procedural expectations on corporate directors to satisfy their fiduciary duty of oversight related to material risk areas and legal...more

A&O Shearman

Delaware Court Of Chancery Dismisses Stockholder Challenge To Merger For Failure To Rebut Business Judgment Rule

A&O Shearman on

On July 25, 2019, Vice Chancellor Kathaleen S. McCormick of the Delaware Court of Chancery dismissed a stockholder suit challenging the $18 billion merger of equals between Towers Watson & Co. and Willis Group Holdings plc,...more

Sheppard Mullin Richter & Hampton LLP

Delaware Supreme Court Allows Caremark Claim to Proceed Against Directors of Ice Cream Manufacturer Following Listeria Outbreak

In Marchand v. Barnhill, No. 533, 2018, 2019 Del. LEXIS 310 (Del. June 18, 2019), the Delaware Supreme Court (Strine, C.J.) reversed a Delaware Court of Chancery (Slights, V.C.) order dismissing a derivative claim alleging...more

A&O Shearman

M&A Watch — Caremark Unfrozen: Delaware Supreme Court Revisits Oversight Claims

A&O Shearman on

The Delaware Supreme Court recently took the opportunity to revisit Caremark with its en banc decision in Marchand v. Barnhill, No. 533, 2018 (Del. June 19, 2019). In Marchand, the Court reversed the dismissal of a...more

Dechert LLP

Delaware Supreme Court Reverses Dismissal of Caremark Claim, Finding Lack of Board-Level Oversight and Director Independence

Dechert LLP on

In Marchand v. Barnhill et al. (“Blue Bell”),1 the Delaware Supreme Court on June 19 unanimously reversed the dismissal of a shareholder derivative lawsuit against the members of the board of directors and two officers of...more

Jackson Walker

Delaware Supreme Court Holds Directors’ Fiduciary Duties Require Monitoring Mission-Critical Risks

Jackson Walker on

In 2015, Blue Bell Creameries USA, Inc., a Delaware subchapter S corporation headquartered in Brenham, Texas (Blue Bell), through subsidiaries made and distributed ice cream tainted with listeria bacteria. As a consequence,...more

Gray Reed

Am I My Director’s Keeper?

Gray Reed on

Board of directors member Y.I. Gnough, who is also president of Algae Company, is in a pickle. Although denying any knowledge of sexual harassment and misconduct by the company founder and deal-maker Iam Algae, three co-board...more

Morris James LLP

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

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

Bennett Jones LLP

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

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

Skadden, Arps, Slate, Meagher & Flom LLP

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

A&O Shearman

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

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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

Seyfarth Shaw LLP

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

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

Skadden, Arps, Slate, Meagher & Flom LLP

"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

McCarter & English, LLP

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

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

Skadden, Arps, Slate, Meagher & Flom LLP

"Dole Ruling Serves as Cautionary Tale for Take-Private Deals"

Earlier this year, in a consolidated breach of fiduciary duty and appraisal action, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery issued a post-trial opinion that includes many important takeaways for...more

Cadwalader, Wickersham & Taft LLP

Chancery Court Provides Lessons on Conflicts of Interest in a Sales Process – Holds Only Financial Advisor Open to Liability

In an October 1st decision (In re Zale Corporation), the Delaware Chancery Court dismissed claims that Zale Corporation’s directors breached their fiduciary duties in connection with Zale’s agreement to merge with Signet. ...more

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