News & Analysis as of

Derivative Suit

M&A Watch: Court Questions Accelerated Vesting of Equity Compensation

by Shearman & Sterling LLP on

As we have previously reported, the Delaware Chancery Court recently dismissed the stockholder class action suit In re Columbia Pipeline Group, Inc. Stockholder Litigation, C.A. No. 12152-VCL (Del. Ch. Mar. 7, 2017),...more

Delaware Chancery Court Applies Corwin To Dismiss Post-Merger Fiduciary Duty Claim After Finding A Royalty Agreement Did Not...

by Shearman & Sterling LLP on

On April 13, 2017, Chancellor Andre G. Bouchard of the Delaware Court of Chancery dismissed a shareholder derivative suit alleging a breach of fiduciary duty against the directors of Paramount Gold and Silver Corp....more

False Statements By Money Managers Support California Commodity Law Convictions

by Allen Matkins on

In 1990, California enacted the California Commodity Law, Stats. 1990, Ch. 969, Corp. Code § 29500 et seq. Although this law hasn’t attracted the attention of legal writers, it has some very sharp teeth, as illustrated by...more

Court Of Chancery Rejects Vague Demand Excusal Allegations

by Morris James LLP on

This is an interesting decision because it applies the rules for determining when a derivative plaintiff, in the LLC context, has sufficiently alleged that pre-suit demand on the board would have been futile. ...more

Corporate Governance Features: for Silicon Valley and San Francisco Bay Area Public Companies

Orrick has unveiled an unprecedented new study examining the corporate governance structures of the largest public companies in the Bay Area, including tech industry leaders. The comprehensive study reviewed the 153...more

Want To File A Derivative Suit? You May Soon Be Required To Read Statutes

by Allen Matkins on

I have been writing recently about SB 203, a bill that is now pending in the Nevada legislature. As introduced, the bill would, among other things, require the following...more

"Key Takeaways: Lessons Learned From Tax-Related Whistleblower Litigation and Shareholder Actions"

On March 8, 2017, Skadden hosted a webinar titled “Lessons Learned From Tax-Related Whistleblower Litigation and Shareholder Actions.” The Skadden panelists were tax partners Nathaniel Carden and Armando Gomez, and litigation...more

Brooklyn Supreme Court Recognizes Private Right of Action for Not-for-Profit Employees under New York Nonprofit Revitalization Act...

Not-for-Profit Corporation Law (“NPCL”) § 715-b, enacted as part of the New York Nonprofit Revitalization Act, requires New York not-for-profit corporations with 20 or more employees and annual revenue in excess of $1 million...more

Wendy’s Executives and Board File Motion to Dismiss

We previously reported that Wendy’s was hit with a putative class action shareholders’ derivative suit in December following its data breach in 2016. Late last week, the executives and Board of Wendy’s filed a Motion to...more

Important Decision by Massachusetts Supreme Court May Significantly Reduce Risk of Merger Litigation

The recent decision by the Massachusetts Supreme Court in Int'l Brotherhood of Electrical Workers Loc. No. 129 Benefit Fund v. Tucci has the potential to significantly reduce merger litigation for publicly traded companies...more

Investor Suits Follow in the Wake of Western Union Settlement of Money Laundering and Fraud Claims

by Ballard Spahr LLP on

On January 19, 2017, the Western Union Company (“Western Union” or the “Company”) entered into a deferred prosecution agreement (“DPA”) with the Department of Justice (“DOJ”), in which Western Union admitted to willful...more

Massachusetts Supreme Court Affirms Dismissal Of Shareholder Class Action And Clarifies That Directors Generally Owe Fiduciary...

by Shearman & Sterling LLP on

On March 6, 2017, in a decision authored by Justice Margot Botsford, the Massachusetts Supreme Judicial Court affirmed the dismissal of an action for breach of fiduciary duty brought by former shareholders of EMC Corporation...more

New York Court Reverses Rejection of M&A Disclosure-Only Settlement Signaling Split from Delaware

by Seyfarth Shaw LLP on

Seyfarth Synopsis: On February 2, 2017, the Appellate Division for the First Department in New York entered an order approving a “disclosure-only” settlement. While acknowledging the “increasingly negative view” of...more

Yahoo Data Breach Update: A Third Notification + Shareholders Sue

Last week, Yahoo issued another warning to some of its customers telling them that their personal information may have been compromised in a data breach. This is the third notification to Yahoo users that their information...more

New Law to Govern Pennsylvania Entities

Effective February 21, 2017, Pennsylvania law will change significantly for business corporations, nonprofit corporations, and especially for limited liability companies (“LLCs”), limited partnerships (“LPs”), limited...more

Court Of Chancery Limits Cost Recovery Following Successful Appeal

by Morris James LLP on

This decision explains what “costs” are recoverable under Court of Chancery Rule 54 following a successful appeal. While the amounts involved normally do not merit much discussion, the cost of bond for an appeal can be...more

Delaware corporate law and litigation: what happened in 2016 and what it means for you in 2017

by DLA Piper on

Delaware has long been known as the corporate capital of the world, and it is now the state of incorporation for 66 percent of the Fortune 500 and more than half of all companies whose securities trade on the NYSE, Nasdaq and...more

U.S. District Court Finds Personal Jurisdiction In Derivative Suit

by Allen Matkins on

I think it is beyond peradventure that a state enjoys personal jurisdiction over corporations incorporated within that state. What about the personal jurisdiction over the corporation’s directors and officers? That was the...more

Yahoo! Data Breach Results in Another Lawsuit Against Corporate Directors and Officers

by Snell & Wilmer on

A number of claims have been made against companies’ directors and officers alleging a breach of fiduciary duty for failing to adequately oversee data security programs. To date, the defendants’ oversight of the programs and...more

Yellow Flags Are Not Red Flags: Delaware Court of Chancery Rejects Caremark Claim in Reiter v. Fairbank

by Carlton Fields on

In October 2016, the Delaware Court of Chancery rejected a shareholder derivative lawsuit premised on an alleged lack of oversight by the directors of Capital One Financial Corp., Reiter v. Fairbank, C.A. No. 11693-CB, 2016...more

Maryland’s Highest Court Clarifies Application of Boland Heightened Scrutiny to Shareholder Demand Response

by Saul Ewing LLP on

In a “sweet” decision for corporate boards, on January 20, 2017, Maryland’s highest court ruled in Oliveira v. Sugarman that the decision of the full board to refuse a shareholder demand is not subject to the heightened...more

Delaware Chancery Court Throws Out Claims Over $10 Million Severance Payment to CEO

by Seyfarth Shaw LLP on

Seyfarth Synopsis: A Delaware Chancery Court judge last week dismissed a derivative complaint seeking to recover a $10 million severance payment made to a corporation’s former CEO because he found that plaintiff shareholder...more

Delaware Supreme Court Signals Due Process Might Prevent Dismissal Based On Demand Futility Issue Preclusion

by Morris James LLP on

When a derivative suit is dismissed for the failure to plead demand futility, does that also mean that any other pending derivative suit based on the same facts must be dismissed because the shareholders are precluded from...more

Court Of Chancery Explains Pleading Rules For A Caremark Claim

by Morris James LLP on

At first look, this decision seems to involve just another unsuccessful failure of oversight Caremark claim against directors. But it is worth reading because it outlines the various theories of a Caremark case and then...more

Delaware Corporate and Commercial Case Law Year In Review – 2016

by Morris James LLP on

Morris James attorneys Lewis Lazarus, Albert Manwaring and Albert Carroll authored an article published in Transaction Advisors titled Delaware Corporate and Commercial Case Law Year in Review – 2016. The article summarizes...more

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