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
In In re Match Group, Inc. Derivative Litigation, the Delaware Supreme Court answered some important questions about the standard of review applicable to conflicted transactions under Delaware law. The first question relates...more
On April 4, 2024, in an opinion authored by Chief Justice Collins J. Seitz, Jr., the Supreme Court of Delaware sitting en banc held that the framework articulated in Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014)...more
You represent a minority shareholder of a closely-held corporation and the company is having an off year. The majority shareholder is the sole member of the board and serves in every officer position. She draws significant...more
When shareholders of a company believe the leaders of the company have breached their fiduciary duties to it, they can bring a lawsuit against those leaders in one of two ways. Shareholders can bring the suit in their own...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
The seven-year anniversary of the Texas Supreme Court’s decision in Ritchie v. Rupee has come and gone, and the court’s holding from 2014 remains the law: Minority shareholders in Texas private companies do not have a cause...more
By definition, a minority owner in a private company does not have control over the business or the right to make decisions for the company. But minority owners do have legal recourse when the company’s majority owners –...more
In an earlier post, I offered a broader-than-usual overview of certain key rights that a minority owner holds in a closely-held business: the right to vote on company action, the right to inspect books and records, the right...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
Delaware Court of Chancery Finds that Director’s Email on Outside Email System Remains Confidential; Delaware Supreme Court Overrules Longstanding Precedent Regarding Derivative Versus Direct Standing; SEC Files Crowdfunding...more
In one week, the Delaware Supreme Court handed down two important opinions simplifying Delaware law on derivative claims. On September 23, 2021, in United Food and Commercial Workers Union and Participating Food Industry...more
David F. Johnson presented his paper “Business Divorce: Minority Shareholder Rights In Texas” to the State Bar of Texas’s Business Disputes Course on September 2-3, 2021. This presentation addressed shareholder oppression...more
In In re Tilray, Inc. Reorganization Litigation (C.A. No. 2020-137-KSJM (Del. Ch. June 1, 2021)), the minority shareholders of Tilray, Inc. alleged that the defendants breached their fiduciary duties by entering a...more
In Katz v. Intel Pharma, LLC, a minority member of a limited liability company sued a former manager for breach of fiduciary duty in a derivative action. No. H-18-1347, 2020 U.S. Dist. LEXIS 120389 (S.D. Tex. July 9, 2020)....more
The legal front remains forbidding for private company minority investors who seek to secure a buyout of their ownership stake based on claims for oppression against the company’s majority owners. It has been six years since...more
Silverberg v. Padda, C.A. No. 2017-0250-KSJM (Del. Ch. Sept. 19, 2019). The Court of Chancery held that plaintiff common stockholders’ fiduciary duty claims challenging the company’s overpayment for dilutive preferred...more
Many Texas lawyers and their private company clients continue to refer to the claim for shareholder oppression as if it remains a viable cause of action under Texas law. And yet, for all practical purposes, the claim for...more
The Business Court sorted through the drama of an affiliated outsider who wanted to buy a company, settled for half and became an insider, and then allegedly used that perch to benefit himself and his family in W. Avalon...more
Almost five years have passed since the Texas Supreme issued its decision in Ritchie v. Rupe in 2014 abolishing shareholder oppression as a claim under common law by minority shareholders in private Texas companies....more
I’m very pleased to present my 11th annual list of this past year’s ten most significant business divorce cases. This year’s list includes four important appellate decisions, including one likely to stand as a landmark...more
This winter forever will be remembered in the Northeast as the winter of the “bomb cyclone,” which gets credit for the 6º temperature and bone-chilling winds howling outside as I write this. So in its honor, I’m accelerating...more
A business’s failure to pay state taxes can be a problem if the entity later wants to bring a lawsuit, or its non-controlling owners want to sue on the entity’s behalf....more
Five Business Entity Forms: • Corporation • General Partnership • Limited Partnership • Limited Liability Partnership (“LLP”) • Limited Liability Company (“LLC”) ...more
Vice Chancellor Glasscock has held that a merger designed to eliminate derivative claims against a majority of directors justified the application of the entire fairness standard of review in a direct challenge to the merger....more
This is another in a series of decisions dealing with the allegation that a minority stockholder controlled a deal through its control of a majority of the board of directors....more