News & Analysis as of

Breach of Duty

Delaware Court Of Chancery Focuses On Fiduciary Duty Of Directors Appointed By Preferred Stockholders

by Roetzel & Andress on

In a recent Delaware Court of Chancery opinion filed April 14, 2017 in The Frederick Hsu Living Trust v. ODN Holding Corporation, the court held that it may be a breach of the directors’ fiduciary duty to cause the...more

Back to Basics – Costly Consequences of Ignoring Process in Benefits Administration

The stories of an employer and a long-term disability insurer and claims fiduciary for an ERISA plan, defendants in two recent cases, ring so true. In the first case, the insurer was designated as claims fiduciary for an...more

Court Held That Submission Of Jury Question On Fiduciary Duty Was Harmless Due To Duplication Of Damages

by Winstead PC on

In Hughes v. Hughes, a husband and wife sued each other for various claims, including breach of fiduciary duty. No. 13-15-00496-CV, 2017 Tex. App. LEXIS 3489 (Tex. App.—Corpus Christi April 20, 2017, no pet. history)....more

Federal Court in Alaska Holds Insurer Liable Under E&O Policy to Indemnify and Defend Construction Manager for Claims by...

by Pepper Hamilton LLP on

KICC –Alcan Gen. v. Crum & Forster Specialty Ins. Co., 2017 U.S. Dist. LEXIS 37560 (March 16, 2017) - A Contractor/Construction Manager, KICC-Alcan General (“KICC”), entered into a subcontract with an MEP subcontractor,...more

The Indiana Supreme Court Finds a Non-Delegable Duty of Worksite Safety Created in Form Design-Build Contracts Between the Owner...

by Reminger Co., LPA on

In Indiana, courts have historically found it is acceptable practice for a general contractor to delegate the duty of ensuring the safety of a subcontractor’s employees to the subcontractor, so long as it is clearly set forth...more

Delaware Chancery Court Dismisses Breach Of Fiduciary Duty And Quasi-Appraisal Claims Under Corwin

by Shearman & Sterling LLP on

On May 3, 2017, Vice Chancellor Joseph R. Slights of the Delaware Court of Chancery declined to dismiss a lawsuit brought by the buyer of EMSI Holding Company (“EMSI”) asserting post-closing claims for indemnification against...more

Court Of Chancery Declines To Hold Unocal Claim Automatically Excuses Demand

by Morris James LLP on

A derivative plaintiff who fails to make a pre-suit demand on the board must show why demand is excused using particularized facts. Here, the plaintiff argued that demand was automatically excused by sufficiently pleading a...more

Breach of Fiduciary Duty Case Against University Retirement Plan Fiduciaries Survives Motion to Dismiss

by Ballard Spahr LLP on

A plaintiffs' class action law firm in St. Louis made national headlines last August when it filed a series of breach of fiduciary duty lawsuits under ERISA, the federal employee benefits law, against the fiduciaries of...more

Court Of Chancery Rejects Novel Breach Of Appraisal Rights Claim

by Morris James LLP on

This decision begins with a conventional analysis of a claim that disclosure violations and director self-interest have tainted a merger vote. That claim was rejected for want of factual support. More unusual, the decision...more

A five minute roundup of upcoming cases and anticipated regulatory developments of interest to the Financial Services sector

by DLA Piper on

Welcome to the fourth edition of our On the Financial Services Horizon newsletter – a regular update on upcoming cases and anticipated regulatory developments affecting the Financial Services sector....more

Eighth Circuit Jimmies The Lid On Pandora’s Box

by Seyfarth Shaw LLP on

Seyfarth Synopsis: In an opinion that may result in increasingly complex ERISA benefits litigation, the Eighth Circuit has allowed a breach of fiduciary duty claim premised on alleged faulty claims handling practices to...more

Creditor Lacks Standing To Bring Derivative Suit against LLC

by Fox Rothschild LLP on

The recent decision of Trusa v. Nepo, C.A. No. 12071-VCMR (Del. Ch. April 13, 2017), stands for the proposition that a creditor lacks standing to assert a derivative claim against a limited liability company. In Trusa, the...more

Recent Cases of Interest to Fiduciaries

by McGuireWoods LLP on

Kroll v. New York State Dept. of Health, 39 N.Y.S.3d 183 (Oct. 5, 2016); see also In re Kroll, 971 N.Y.S.2d 863, 865 (Sur. Ct. 2013) - Court approves “decanting” of a trust to effectively remove a beneficiary’s future...more

"Court of Chancery Provides Guidance on 'Credible Basis' Standard for Obtaining Books"

The Delaware Supreme Court has held that strict adherence to the procedural requirements of Section 220 of the Delaware General Corporation Law “protects the right of the corporation to receive and consider a demand in proper...more

"Delaware Supreme Court Examines Director Disinterestedness, Independence"

Delaware law provides important tools for directors to maintain control of derivative lawsuits.1 One such tool is the “demand requirement” embodied in Court of Chancery Rule 23.1, which requires that before a stockholder acts...more

"Q&A With Delaware Litigation Partner Ed Micheletti"

What is the most significant recent development in Delaware, from a litigation standpoint? The most significant recent development impacting deal litigation in Delaware is the continuing evolution of the Corwin doctrine,...more

Does an Exculpatory Clause Protect Trustees Against Claims of Breach of Fiduciary Duty?

The starting point for evaluating whether trustees have breached a fiduciary duty is the settlor's intent as provided in a trust instrument, and many trusts contain clauses known as "exculpatory" clauses. These clauses often...more

"The Continuing Evolution of Corwin in Delaware Courts"

Recent Delaware Supreme Court and Court of Chancery cases have continued to refine the impact and requirements of Corwin v. KKR Financial Holdings LLC, in which the Delaware Supreme Court held that the business judgment rule...more

Claims Against Investment Adviser in ERISA Fee Litigation Case Dismissed

A federal district court in North Carolina dismissed claims by BB&T Corp.’s 401(k) plan participants that Cardinal Investment Advisors, LLC, the plan’s outside investment advisor, breached its ERISA fiduciary duties by...more

If You Expect to Work in the Family-Owned Business for Life, Be Sure to Get It in Writing

by Murtha Cullina on

Family-owned businesses often employ multiple family members. Even if there is an expectation that employment will continue indefinitely, the company and the family member employees both usually reserve the right, explicitly...more

Court Of Chancery Explains The “Known Looter” Theory For Controllers

by Morris James LLP on

This is an interesting decision because it examines an intriguing legal theory for holding a controlling stockholder liable in a sale: the “known looter” theory. Generally speaking, controllers can sell their stock to whoever...more

Your Daily Dose of Financial News

by Robins Kaplan LLP on

The Fed wrapped up its Open Market Committee meeting yesterday without any change in interest rates but with an expression of confidence in the economy, despite Q1’s sub-1 percent growth figure (which it dubbed “transitory”)....more

Delaware Law Updates – The Steadfast Refusal Of The Delaware Courts To Grant Creditors Quasi-Standing To Assert Fiduciary Claims...

by McCarter & English, LLP on

In Trusa v. Nepo, et al. (Xion Management, LLC), Del. Ch. C.A. No. 12071-VCMR (April 13, 2107), the Delaware Court of Chancery again fortified the Delaware limited liability company against growing attacks by creditors...more

Employee Benefits Developments - April 2017

by Hodgson Russ LLP on

Deadline to Provide QSEHRA Notice Suspended - IRS Notice 2017-20 - Citing the lack of published guidance, the Internal Revenue Service (IRS) suspended the employer advance notice requirement for qualified small...more

Home Depot Agrees to Settle Data Breach Shareholders’ Suit

In a surprise move late last week, Home Depot has agreed to settle a shareholders derivative suit filed against current and former members of the Board of Directors and the Chief Executive Officer and Chief Information...more

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