News & Analysis as of

Derivative Suit Shareholders

“If at First You Don’t Succeed…” - Shareholders Keep Trying to Sue D&Os for Data Security Breaches

by Locke Lord LLP on

Several high-profile lawsuits have been filed in recent years by shareholders seeking to hold corporate officers and directors liable for damage resulting from data security breaches. For example, directors and officers at...more

Court Of Chancery Declines To Hold Unocal Claim Automatically Excuses Demand

by Morris James LLP on

A derivative plaintiff who fails to make a pre-suit demand on the board must show why demand is excused using particularized facts. Here, the plaintiff argued that demand was automatically excused by sufficiently pleading a...more

Appeal in Home Depot Data Breach Derivative Action Results in Settlement of Corporate Governance Claims

Snatching victory of a sort from the jaws of defeat, shareholders who brought a derivative action alleging that the 2014 Home Depot data breach resulted from officers’ and directors’ breaches of fiduciary duties have reached...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

Delaware Supreme Court Confirms that Dilution Claims Typically Are Derivative and Are Extinguished After a Merger

Stockholder claims alleging wrongful dilution are typically considered to be derivative in nature. Several decisions out of Delaware, however, have created exceptions to this general rule allowing stockholders to sue...more

Race to Courthouse in Shareholder Derivative Actions Could Raise Due-Process Issues

The Delaware Supreme Court requested further consideration of the federal due-process issues that might arise where a court is asked to hold that a shareholder derivative action is precluded because a prior derivative action...more

Shareholders Derivative Suit Filed against Wendy’s for Data Breach

Continuing the trend of filing a shareholders derivative suit following a data breach, a Wendy’s shareholder recently filed a derivative suit against Wendy’s executives and board members alleging they did not adequately...more

Home Depot Evades Shareholder’s Derivative Suit for 2014 Data Breach

by BakerHostetler on

Public companies that are proactively working to mitigate “cyber” risks and prepare to respond to potential incidents frequently ask whether a “breach” will lead to litigation, loss of customers, stock price decline, and...more

Home Depot Data Breach Derivative Suit Sent Home

Judge Thomas W. Thrash Jr. of the U.S. District Court of Georgia permanently shelved a derivative suit brought by shareholders of Home Depot. Home Depot is a multinational home improvement retailer. In September, 2014,...more

Shareholders’ Derivative Suit Against Home Depot Dismissed

On November 30, 2016, The Home Depot, Inc. (Home Depot) got a victory in the shareholders’ derivative suit filed against it for its alleged failure to institute necessary controls to secure its data relating to its 2014...more

Home Depot Cyber Derivative Action Shuttered: Another Data-Breach Derivative Suit Fails to Clear Fundamental Corporate Law Hurdles

by Carlton Fields on

The recent dismissal of a Home Depot derivative action ends a string of high-profile derivative suits stemming from large-scale corporate data breaches. On November 30, the Northern District of Georgia dismissed a shareholder...more

Delaware Supreme Court Finds Pre-Suit Demand Was Excused

by Morris James LLP on

When a stockholder files a derivative suit she can avoid dismissal under Rule 23.1’s pre-suit demand-on-the-board requirement by showing that a majority of the directors were not independent enough to fairly consider her...more

To Hell with Hadden: The Adoption of the Tooley Standard in Tennessee

by Butler Snow LLP on

The Tennessee Supreme Court recently adopted a new standard for determining whether a shareholder claim is direct or derivative. Specifically, in Keller v. Estate of Edward Stephen McRedmond, the Court “set aside the...more

Is This A Derivative or a Direct Shareholder Claim? New Tennessee Standard Makes it Easier to Tell

by Burr & Forman on

In Tennessee, shareholders may file a lawsuit for injuries suffered by the company or by the shareholders individually.  A shareholder files a derivative action when the company is entitled to some legal relief; and files a...more

U.S. Court for District of Minnesota Dismisses Target Data Breach Shareholder Derivative Suits

On July 7, 2016, the United States District Court for the District of Minnesota granted Target’s unopposed motion to dismiss the derivative actions filed by a number of shareholders against the company relating to the...more

Shareholder Derivative Suit Following Data Breach Misses Target

On July 7, 2016, Judge Paul A. Magnuson of the United States District Court for the District of Minnesota granted Defendants’ Motions to Dismiss a shareholder class action that had been initiated following a 2013 holiday...more

A Fun New Fact Pattern for Demand Futility

by Morris James LLP on

The concept of demand futility, rooted in the fundamental elements of Delaware corporate law, has been present for decades. The demand futility rules developed, as most doctrines of Delaware corporate law do, through judicial...more

Business Litigation Reporter - June 2016

by Goodwin on

Goodwin Procter’s Business Litigation Reporter provides timely summaries of key cases and other developments within dedicated Business Litigation sessions and related courts throughout the country – courts within which...more

Corporate Investigations and White Collar Defense - June 2016

Eye on the Supreme Court—Corruption and Fraud Edition - Why it matters: This session, the Supreme Court has undertaken the review of numerous cases that raise thorny issues arising in the white collar context. In our...more

Court Of Chancery Closes The Door Left Open By Pyott And Applies Preclusion To Derivative Suit

by Morris James LLP on

Delaware does hold that the dismissal of a derivative suit in another jurisdiction may preclude the prosecution of a similar derivative suit in Delaware. ...more

Seventh Circuit Applies Strong Business Judgment Rule to Reject Assertion of Demand Futility

by Foley & Lardner LLP on

In a recent decision in a diversity case, the Seventh Circuit deferred to a state legislature’s “strongly pro-management version of the business judgment rule,” rejecting a derivative claim filed by shareholders in an Indiana...more

2015 Half-year in review M&A legal developments

by White & Case LLP on

We set out below a number of interesting English court decisions and market developments which have taken place and their impact on M&A transactions. This review looks at these developments and gives practical guidance on...more

Business Litigation Reporter October 2015

by Goodwin on

Goodwin Procter’s Business Litigation Reporter provides timely summaries of key cases and other developments within dedicated Business Litigation sessions and related courts throughout the country – courts within which...more

Navigating Derivative Lawsuits Against Mutual Funds After Northstar

by Carlton Fields on

The Ninth Circuit Court of Appeals this spring held that mutual fund shareholders could maintain direct claims against the fund’s trustees for breach of their common law fiduciary duties. Before Northstar v. Schwab, such...more

Court Of Chancery Explains When A Dilution Claim Is Direct

by Morris James LLP on

It is often said that when a majority stockholder issues more stock to himself at an unfair price that is a direct claim and not derivative. But as this decision points out, that is a little too simplistic....more

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Cybersecurity

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