Derivative Suit Shareholders

News & Analysis as of

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

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

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

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

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

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

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

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

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

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

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

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

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

Still a Target: Court Certifies Bank Class Claims Against Retailer Following Data Breach

Although Target has tentatively settled consumer data breach class action claims, the retailer remains in the crosshairs of the plaintiffs’ class action bar. On September 15, a Minnesota federal district court certified a...more

Failure To Follow Up Demand Dooms Derivative Suit

Shareholders wanting to pursue a derivative suit all come to the same fork in the road.  One fork is to make a demand.  The other is to file a lawsuit and allege that demand would have been futile.  Most plaintiffs choose the...more

Court Of Chancery Outlines Discovery In Books and Records Case

First, the discovery cannot be of the very records the plaintiff seeks to obtain, for that will give him the relief he seeks before he proves his case. Second, it is often the case that the records are being sought for use in...more

Former In-House Attorney Cannot Duck Trade Secrets Allegations with Anti-SLAPP Motion

On July 17, 2015, a California appellate court affirmed the denial of an intellectual property attorney’s anti-SLAPP motion against his former employer. Terrence Wyles, the defendant and former in-house counsel for medical...more

Glossary of Important Securities Regulation Terms and Definitions

This Glossary is designed to provide law students taking Securities Regulation with a tool that will assist them in learning the basic language of securities law and achieve a working knowledge of the fundamental principles...more

Mergers & Acquisitions Glossary

This Glossary contains many of the important terms and definitions used in the M&A world. The Glossary is not exhaustive, however. Like most areas of the law, M&A is a highly complex subject that involves several legal and...more

A Firewall for the Boardroom: Best Practices to Insulate Directors and Officers From Derivative Lawsuits and Related Regulatory...

Shortly after the massive 2013 Target data breach, shareholders filed four derivative lawsuits against the company’s directors and some of its officers (13 CARE 624, 3/20/15). The shareholders alleged that the defendants had...more

Court Of Chancery Denies Standing After Spin-Off

After a spin–off of a subsidiary, there is a question as to whether the subsidiary’s stockholders have standing to bring a derivative suit on behalf of the subsidiary for past wrongs against the subsidiary committed by the...more

Checking in on Target’s Derivative Litigation: 18 Months Later, Directors Remain Stuck in the Checkout Line

Everyone remembers the Target Corporation data breach, one of the worst in history. In late 2013, hackers forced their way into Target’s computer system, accessing the information of approximately 70 million customers,...more

Should Your Startup Become a Public Benefit Corporation?

With the increased attention paid to companies that feature public benefits or social impact as part of their mission or business plan and with the rise of social impact investors, more and more states are enacting public...more

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