Breach of Duty

News & Analysis as of

Bitter C-Suite: Privacy, Security and Data Protection Issues Facing Corporations, Directors and Officers [Video]

With data breaches, cyberterrorism and governmental enforcement of the protection of privacy on the rise, corporations are facing an increased likelihood of claims, legal proceedings and costs. Without a proper understanding...more

Can Remainder Beneficiaries of a Revocable Trust Sue for a Breach of Fiduciary Duty That Occurred During the Settlor’s Lifetime?

Imagine the following scenario: The trustee of a revocable trust dissipates a substantial amount of trust assets to buy men’s basketball season tickets at the Dean E. Smith Center. The settlor does not follow college...more

Seeing the Retirement Plan Dentist to avoid a Plan Root Canal

About a dozen or so year ago, there was a medical report that dental plaque could cause heart disease. The cynic in me tells me that this was some sort of dental conspiracy to increase revenue as fluoridated water and other...more

U.S. Appeals Court Affirms Judgment Against 401(k) Plan Fiduciaries for Excessive Recordkeeping Fees

On March 19, 2014, the U.S. Court of Appeals for the Eight Circuit (the “Appeals Court”) issued its highly anticipated ruling in the case of Tussey v. ABB, Inc., affirming a Missouri trial court’s $13.4 million judgment...more

This Week In Securities Litigation (Week ending April 4, 2014)

High speed trading and insider trading were key topics this week. Author Michael Lewis released a new book on high speed trading and, in an interview claimed the markets are “rigged.” The Commission focused on insider...more

The New York Court of Appeals Considers the Consequences of a Liability Insurer’s Breach of the Duty to Defend

What are the consequences of a liability insurer’s breach of the duty to defend its insured against a potentially covered claim? Recent decisions from the New York Court of Appeals highlight differing views nationwide on...more

The Teflon Fiduciary: Could Your U.S. Adviser Avoid Responsibility For Bad Advice?

Ronald Reagan was referred to years ago as “the Teflon President” because voters never seemed to hold him responsible for his administration’s missteps. A significant decision on fiduciary status has just been issued by the...more

Divisional Court Applies Supreme Court’s Guidance on Preferability and Certifies Claim Against Religious Boarding School

In Cavanaugh v. Grenville Christian College (“Cavanaugh”), a group of former students from an Anglican boarding school have alleged that they were subjected to systemic physical and psychological abuse to promote and...more

Recent Governmental decision may benefit contractors on breach of duty of good faith, fair dealing claims.

It is likely that most prime contractors, at one time or another, have felt that their Government customer was not treating them fairly. It is not always clear, however, when conduct that the contractor views as unfair or...more

In re Rural Metro Corp. S'holders Litig., C.A. No. 6350-VCL (Del. Ch. Mar. 7, 2014) (Laster, V.C.)

In this post-trial decision, the Court of Chancery held a financial advisor liable for aiding and abetting breaches of fiduciary duty by a target board in the sale of the company. The Court concluded that the financial...more

Another Way To Become Personally Liable To A Multiemployer Plan

I have blogged in the past about individuals and businesses that are not signatories to a collective bargaining agreement being found liable for withdrawal liability imposed by multiemployer pension plans (plans jointly...more

Who’s in Charge – Is the Board Responsible to Monitor Its Financial Advisor or Vice Versa?

In the case of In re Rural Metro Corporation Stockholders Litigation, the Court of Chancery of the State of Delaware held that the primary financial advisor retained by Rural/Metro Corporation aided and abetted the board in...more

In Tiblier, Fifth Circuit Holds Investment Advisor Was Not a Fiduciary With Respect to Investment that Resulted in Plan Losses

The Fifth Circuit ruled last month that a plan investment advisor could not be held liable under ERISA for plan losses as a result of an investment, where the advisor did not act as a fiduciary with respect to that...more

Caspian Select Credit Master Fund Ltd. v. Key Plastics Corp., C.A. No. 8625-VCN (Del. Ch. Feb. 24, 2014) (Noble, V.C.)

In this letter opinion, the Court of Chancery granted plaintiff’s request for books and records pursuant to 8 Del. C. § 220. The stockholder plaintiff sought, among other things, to value its equity holding in Key Plastics...more

Delaware Court Holds Investment Banker Liable for Aiding and Abetting Buyout Target Board’s Breach of Fiduciary Duty

The Delaware Chancery Court recently held a respected investment banking firm liable for aiding and abetting breaches of fiduciary duty by the target company board in connection with an allegedly flawed sale process. The...more

Financial Advisor Found Liable for Aiding and Abetting Director Breaches of Fiduciary Duties in Connection With Cash-Out Merger -...

In a 91-page post-trial decision, Chancellor Travis Laster found RBC Capital Markets LLC (“RBC”) liable for aiding and abetting breaches of fiduciary duty in connection with RBC’s role as a financial advisor in the 2011 $438...more

Delaware Court of Chancery Grants Summary Judgment Dismissing Breach of Fiduciary Duty Claims In Absence of Evidence of Directors’...

In In re Answers Corp. Shareholders Litigation, C.A. No. 6170-VCN, 2014 WL 463163 (Del. Ch. Feb. 3, 2014), the Delaware Court of Chancery (Noble, V.C.) granted summary judgment in favor of defendants in a stockholder class...more

Delaware Court of Chancery Finds Financial Advisor Liable for Aiding and Abetting Breaches of Fiduciary Duty

In a much-anticipated, 91-page post-trial opinion issued on March 7, 2014, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery held in In re Rural Metro Corporation Stockholders Litigation that the lead...more

M&A Update: The “Gatekeepers”: Delaware Court Holds Conflicted Financial Advisor Liable For Aiding And Abetting Breach Of...

Delaware courts have increasingly shined a spotlight on what they consider to be conflicts of interest for sell-side financial advisors. On March 7th, the Delaware Chancery Court hit these conflicts with a laser beam. In a...more

Eleventh Circuit Joins Fourth Circuit in Rejecting Continuing Breach Approach to ERISA's Statute of Limitation

When a participant of a defined contribution plan complains that the plan fiduciaries breached their duties in failing to remove poor performing funds from the 401(k)’s investment options, is the date of the breach when the...more

In the Rural/Metro Decision, Delaware Court Emphasizes Conflicts of Interest in Finding Breaches of Fiduciary Duties

Citing various conflicts of interests involving management, board members and financial advisors, Vice Chancellor Laster of the Delaware Court of Chancery found that the Board of Directors of Rural/Metro Corporation (“Rural”)...more

Two law school professors and their 401(k) study

There is a tendency to shoot the messenger because folks don’t like the message. I ought to know. Whether it was in college, law school, or working at a third party administrator, I was the messenger of some terrible news....more

Appellate Court Notes: Week of March 10

SC19095 - Edgerton v. Clinton / SC19095 Dissent - Edgerton v. Clinton - Town appealed a $12 million jury verdict when a volunteer fire fighter was sideswiped and then took off after the offending vehicle. He relayed to...more

Financial Advisor Liable for Aiding and Abetting Buyout Target Board’s Breach of Fiduciary Duty

On March 7, the Delaware Court of Chancery published a post-trial opinion in In Re Rural Metro Corporation Stockholders Litigation (Rural Metro) finding Rural/Metro’s financial advisor RBC liable for aiding and abetting the...more

How a Company Insider Can Leave, Take Company Business and Not Breach Her Fiduciary Duty

In a previous blog post, The Fiduciary Duty of Preserving Corporate Opportunities, I wrote: In general, an officer, director, partner, LLC member or shareholder in a closely held corporation owes a fiduciary duty not...more

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