Bar Exam Toolbox Podcast Episode 167: Listen and Learn -- Direct and Derivative Actions (Corporations)
Board Diversity Podcast
Securities Litigation and Disclosure Issues
Podcast: CFTC Issues LIBOR Transition Relief for Swaps
After a de novo review of the record following a Magistrate in Chancery’s final report, Vice Chancellor Fioravanti of the Delaware Court of Chancery declined to accept the Magistrate’s recommendation to deny a...more
Joel Newman v. KKR Phorm Investors, L.P., et al. C.A. No. 2022-0310-NAC (Del. Ch. Aug. 31, 2023). At the motion to dismiss stage, Delaware courts will consider the facts alleged in the complaint as well as the documents...more
Traditionally deployed to protect a corporation from its board’s imprudent investment or financial decision-making, in recent years shareholders have taken to bringing derivative actions on a corporation’s behalf for its...more
A books and records request is a tool used by stockholders to gather information in advance of filing a derivative lawsuit against officers and directors. These requests can also be used by activist investors to gather...more
Examine a major Ninth Circuit decision affirming dismissal of a Section 14(a) derivative action based on a forum-selection clause; Highlight the Third Circuit’s adoption of the Omnicare standard for securities fraud claims;...more
In Lebanon County Employees’ Retirement Fund v. Collis, C.A. No. 2021-1118-JTL (Del. Ch. Dec. 15, 2022), the Delaware Court of Chancery denied a motion to dismiss as untimely a derivative action against a pharmaceutical...more
On December 15, 2022, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery denied a motion to dismiss claims as untimely in a derivative action brought by stockholders against the officers and directors of...more
Takeaways - Corporations can face a wave of stockholder actions purporting to enforce the corporations’ own legal rights, from books and records requests to derivative suits and litigation demands. In contrast to class...more
In this issue we discuss how plaintiffs are finding creative ways to obtain books and records, and appraisal cases where Delaware courts held that fair value rose between signing and closing. Other articles describe how the...more
In September 2021, in United Food and Commercial Workers Union v. Zuckerberg, the Delaware Supreme Court embraced the Court of Chancery’s suggestion that the analysis for evaluating demand futility in derivative cases should...more
In a derivative action In re Boeing Company Derivative Litigation, Boeing’s stockholders obtained approval from the Delaware Court of Chancery for a landmark US$237.5 million settlement of derivative claims targeting the...more
I can’t say what the number is, but my own experience tells me that a significant percentage of lawsuits by a minority owner of a closely-held company against those in control of the company include a demand for an...more
Takeaways - The Delaware Supreme Court simplified the pleadings-stage test applied to derivative suits where no demand has first been made on the board. Disputes about stockholder books-and-records requests focus...more
The pages of this blog are filled with cases pitting a minority owner of a closely-held business—most often a corporation or an LLC—against the majority. Books and records proceedings, derivative actions brought on behalf of...more
In In re The Boeing Company, the Delaware Court of Chancery held that Boeing stockholders that sued the company over losses relating to safety problems with Boeing’s 737 MAX airplane had adequately pleaded that a majority of...more
If ever there was a ticking time bomb of a family-owned, closely held business more likely to result in business divorce litigation than the one in Matter of Brady v Brady, 2021 NY Slip Op 02705 [4th Dept Apr. 30, 2021], I...more
This quarter’s issue includes summaries and associated court opinions of selected cases principally decided between November 2020 and January 2021. Derivative Litigation - Second Circuit Reverses Summary Judgment...more
The Supreme Court of Delaware recently affirmed a decision by the Court of Chancery that ordered a corporation to produce certain books and records to a shareholder, and which granted leave to the shareholder to take a...more
Trials involving books and records requests have become more common since the Delaware Supreme Court encouraged stockholder plaintiffs to use the “tools at hand” to discover information necessary to establish demand futility...more
In Salladay v. Lev, the Delaware Chancery Court elaborated on how early a corporate board must take protective measures to shield a conflicted transaction from entire fairness review. Salladay involved a motion to dismiss a...more
This issue includes summaries and associated court opinions of selected cases principally decided between October 2019 and January 2020. ...more
Last year, we highlighted the risks of filing a Section 220 books and records request post-litigation, citing a case where the Delaware Chancery Court found that such use was an improper attempt to “sue first, ask questions...more
In a recent post-trial opinion, Vice Chancellor Laster of the Delaware Court of Chancery issued an important decision regarding stockholder books and records demands under Section 220(b) of the Delaware General Corporation...more
Consistent with trends in recent years, in 2019 Delaware corporation law largely was shaped by post-closing suits for money damages against directors who had approved mergers and acquisitions. Two Delaware Supreme Court...more
Section 220 of the Delaware General Corporation Law affords stockholders a qualified right to inspect a corporation's books and records. A Section 220 inspection is a powerful stockholder right, and indeed, the Delaware...more