Breach of Duty

News & Analysis as of

Delaware Likes Garner/California Not So Much

In 1970, Richard Nixon was president, the 26th Amendment was still not part of the Constitution, and the Fifth Circuit Court of Appeals issued its opinion in Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970). In that...more

Doing Business in Canada: Directors' Liabilities

DIRECTORS’ LIABILITIES - In Canada, there is a legal duty for every director and officer of a corporation to act honestly and in good faith with a view to the best interests of the corporation when exercising his/her...more

Hedge Funds and Material Nonpublic Information: The Role of Deception, Duty, Breach, Personal Benefit and Knowledge in Creating...

The last thing hedge funds need is another wake up call about the risks of liability for trading on the basis of material nonpublic information. But if they did, a July 17 article in the Wall Street Journal would provide it....more

They are coming for your client’s data. What will you do if they succeed?

Data security breaches—no industry is immune. These hackers can phish, spoof, skim, packet sniff, and key log their way into your system. Once a hacker successfully hacks into a corporation’s server, the breach will go...more

IR Executive Settles SEC Insider Trading Charges

The SEC filed a settled insider trading case against a partner in an investor relations firm who traded securities based on information he obtained from draft press releases he worked on for firm clients. The settled action...more

U.S. Supreme Court Changes Fiduciary Rules for Retirement Plans with Employer Stock

A recent U.S. Supreme Court decision affects fiduciaries of retirement plans that have investments in employer stock. In the decision, the Supreme Court held that a retirement plan fiduciary is not entitled to a presumption...more

Employee Benefits Update: Unanimous Supreme Court Issues ERISA Fiduciary Duty Opinion

On June 25, the Supreme Court issued a unanimous decision in Fifth Third Bancorp v. Dudenhoeffer, which is likely to change the future of the Employee Retirement Income Security Act (ERISA) stock drop litigation. ...more

Dent v. Ramtron Int’l Corp., C.A. No. 7950-VCP (Del. Ch. June 30, 2014) (Parsons, V.C.)

In this memorandum opinion, the Court of Chancery granted the defendant’s motion to dismiss the plaintiff’s claims that defendants breached their fiduciary duties in connection with the sale of the defendant-corporation to a...more

Rail Corporation New South Wales v King [2014] NSWCA 207

The New South Wales Court of Appeal recently handed down judgment in the matter of Rail Corporation New South Wales v King. The facts of the matter are that at 3:00 am on the morning of Saturday, 2 September 2006, Shane King...more

First Circuit Finds for Life Insurer in ERISA Class Action Challenging Retained Asset Accounts to Pay Life Insurance Benefits

In a unanimous panel decision, the U.S. Court of Appeals for the First Circuit reversed a trial court’s ruling that the defendant, Unum Life Insurance Company of America (Unum), had breached fiduciary duties under the...more

Raul v. Astoria Fin. Corp., C.A. No. 9169-VCG (Del. Ch. June 20, 2014) (Glasscock, V.C.)

In this memorandum opinion, the Court of Chancery granted defendant’s motion to dismiss, finding that plaintiff was not entitled to attorneys’ fees under the corporate benefit doctrine because plaintiff had not presented a...more

Pro Se Defendant Wins Trial On Breach Of Fiduciary Duty Claims In Business Court

When I was a young pup preparing to go to court against the uncommon adversary who was proceeding without a lawyer, I would joke that "I hope I don't lose." Luckily, I never did....more

Cambridge Ret. Sys. v. Bosnjak, C.A. No. 9178-CB (Del. Ch. June 26, 2014) (Bouchard, C.)

In this memorandum opinion, the Court of Chancery granted in part and denied in part the defendants’ motion to dismiss for failure to make a pre-suit demand on the board and for failure to state a claim, holding that demand...more

Amlin v Austcorp – It’s all in the wording

In Amlin Corporate Member Ltd v Austcorp Project No 20 Pty Limited [2014] FCAFC 78, the Full Court of the Federal Court rejected the insurers’ argument that certain policies did not respond because the claim was made before...more

"Non-Trivial Probability" of Excess Judgment Obligates Insurer to Pay for Independent Defense Counsel

The court in Perma-Pipe, Inc. v. Liberty Surplus Insurance Corporation, Case No. 13 C 2989, 2014 U.S. Dist. LEXIS 54867 (N.D. Ill. April 21, 2014), held that a CGL insurer breached its duty to defend by refusing to pay for...more

In re TriQuint Semiconductor, Inc. S'holders Litig., C.A. No. 9415-VCN (Del. Ch. Jun. 13, 2014) (Noble, V.C.)

In this letter opinion denying plaintiffs’ motion to expedite, the Court of Chancery held that plaintiffs, shareholders of TriQuint Semiconductor, Inc. (“TriQuint” or the “Company”), failed to assert a colorable claim that...more

Summary of California Appellate Decisions - June 2014

Insurance Coverage; Professional Services Exclusion; Completed Operations; Duty To Defend: North Counties Engineering, Inc. v. State Farm General Insurance Company (2014) 224 Cal.App.4th 902, 169 Cal.Rptr.3d 726...more

Bishop Gassis v. Corkery, C.A. No. 8868-VCG (Del. Ch. May 28, 2014) (Glasscock, V.C.)

In this post-trial decision in a proceeding pursuant to 8 Del. C. § 225, the Court of Chancery held that the board of the Sudan Relief Fund, Inc. (the “Fund”), a charitable corporation, validly removed the plaintiff as a...more

Delaware Court of Chancery Rules That a Major Debt Holder and 48 Percent Stockholder Is a Controlling Stockholder and Owes...

In Hamilton Partners, L.P. v. Highland Capital Management, L.P., the Delaware Court of Chancery denied a motion to dismiss breach of fiduciary duty claims brought by former stockholders of American Home Patient, Inc. (AHP)...more

Fund Managers Sue Deutsche Bank for Breach of Contract and Fiduciary Duty

On June 18, financial institutions including BlackRock Inc., Pacific Investment Management Co., Prudential Financial Inc., DZ Bank AG, and Charles Schwab Co., sued Deutsche Bank National Trust Company in New York state court....more

Ninth Circuit Uncharacteristically Takes the Lead in Limiting Plaintiffs' Rights to Recover for Breach of Fiduciary Duty under...

In 2011, the U.S. Supreme Court recognized, for the first time, that some forms of equitable relief could lead to an award of a monetary payment for breach of fiduciary duty under section 502(a)(3) of ERISA, 29 U.S.C. section...more

Lenders Across North Carolina Can Breathe Sigh of Relief - NC Supreme Court reverses decision in significant banking litigation

In a case that has implications for all banks in North Carolina, the North Carolina Supreme Court removed a cloud of uncertainty that has remained over the North Carolina banking industry for more than 18 months. The Supreme...more

The Inadvertent Fiduciary: Mass Mutual Crosses The Line

Plan fiduciaries are held to the highest performance standards and can be personally liable for breaches of fiduciary responsibility. Because of this potential liability, there should be clear and rational rules enabling...more

Nevada Exculpation Statute Leads To Dismissal Of Claims Against Erstwhile Officer

Nevada, unlike either California or Delaware, exculpates corporate officers from liability to the corporation for any damages as a result of “any act or failure to act” in his or her capacity as an officer unless it is proven...more

New Fiduciary Rule Delayed

The Department of Labor (DOL) just announced that they were delaying the implementation of a new fiduciary rule for retirement plans and individual retirement accounts. They claim it will be released in 2015. How many years...more

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