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Derivatives Shareholder Litigation

Cooley LLP

Recent Trends in Parallel Derivative Action Settlement Outcomes

Cooley LLP on

A new report by Cornerstone Research, a top consulting and expert testimony firm, highlights recent trends in settlements of derivative lawsuits brought in parallel to securities class actions....more

Cornerstone Research

Parallel Derivative Action Settlement Outcomes: 2023 Review and Analysis

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The authors examine settlement outcomes of derivative lawsuits linked to securities class actions, focusing on 110 cases associated with securities class action settlements between 2019 and 2023....more

J.S. Held

Will Derivative Shareholder Litigation Be the New Firing Line for Ensuring Achievement of Corporate Sustainability Goals?

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Mitigating climate change impacts is becoming a critical business priority, and the pressure to achieve corporate sustainability objectives is mounting as investment-focused regulations continue to drive companies toward...more

Allen Matkins

A Recent Reminder That Omitting This Averment May Doom A Derivative Claim

Allen Matkins on

Section 800 of the California Corporations Code applies to actions brought in the name of any domestic or foreign corporation, aka derivative actions.  It is similar, but not the same as, Delaware Court of Chancery Rule 23.1...more

Allen Matkins

A First Sighting Of Zuckerberg Decision In California

Allen Matkins on

Last year, the Delaware Supreme Court adopted a tripartite test for assessing demand futility allegations in derivative actions. United Food & Commercial Workers Union v. Zuckerberg 262 A.3d 1034 (Del. 2021). Under this...more

A&O Shearman

Delaware Court Of Chancery Applies Contemporaneous Ownership Requirement And Declines To Extend Equitable Derivative Standing

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On May 13, 2022, Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery dismissed certain stockholder derivative claims for breaches of fiduciary duty brought against the founder-CEO and other directors of...more

A&O Shearman

Finding That Allegedly Conflicted Acquisition Satisfied Entire Fairness Review, Delaware Court Of Chancery Rejects Breach Of...

A&O Shearman on

On April 27, 2022, Vice Chancellor Joseph R. Slights III of the Delaware Court of Chancery entered judgment in favor of defendant, the CEO/Founder and then-Chairman (the “Chairman”) of Tesla Motors, Inc. (the “Company”),...more

A&O Shearman

Eighth Circuit Affirms Dismissal Of Merger-Related Derivative Suit For Failure To Plead Demand Excusal

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On April 7, 2022, the United States Court of Appeals for the Eighth Circuit affirmed the dismissal of derivative claims brought by shareholders of Centene Corporation (the “Corporation”) against directors and officers of the...more

Allen Matkins

California Court Of Appeal Finds Caremark To Be Too Steep A Hill For Plaintiff To Climb

Allen Matkins on

In January 2018, the media began reporting on  two security vulnerabilities affecting Intel Corporation's microprocessors - dubbed "Spectre" and "Meltdown".  Following these disclosures, Intel's stock price fell and its...more

Allen Matkins

Professor Bainbridge's Quibble Might Be No Quillet

Allen Matkins on

In this post, UCLA Law School Professor Stephen Bainbridge quibbles my description of Delaware's two-step approach to the special litigation committee defense in derivative suits.  In particular, he points out that Delaware...more

Wilson Sonsini Goodrich & Rosati

Chancellor McCormick Provides Helpful Guidance on Pre-Suit Litigation Demands Under Delaware Law

Last month, Delaware's new Chancellor Kathaleen S. McCormick issued a decision largely dismissing challenges to board action after finding that the plaintiff's emails to the board constituted pre-suit litigation demands, and...more

Kramer Levin Naftalis & Frankel LLP

California Federal Court Enforces Delaware Forum Bylaw and Dismisses Derivative Shareholder Suit Including Exchange Act Proxy...

We have discussed in previous alerts a spate of shareholder lawsuits alleging corporate fiduciary breaches and securities law violations tied to the defendant company’s alleged failure to fulfill diversity aspirations. ...more

Allen Matkins

Does Requiring Shareholder Demand Increase Firm Value?

Allen Matkins on

California, like many other states, imposes a demand requirement on shareholders who want to maintain a derivative action.  Thus, Corporations Code Section 800(b)(2) requires that a plaintiff allege in its complaint with...more

Allen Matkins

Nevada's Director Liability Standard Defeats Another Derivative Suit

Allen Matkins on

NRS 78.138(3) imposes a statutory presumption that other than in cases of a change in control of the corporation, directors and officers, in deciding upon matters of business, act in good faith, on an informed basis and with...more

Allen Matkins

Court Finds Derivative Claims Involving Nevada Corporation Were Not "Validly In Litigation"

Allen Matkins on

A shareholder bringing a derivative claim, faces a choice.  The shareholder can either make a demand on the board of directors and then challenge the board's decision not to proceed or file a complaint alleging that the...more

McGlinchey Stafford

Am I a party entitled to enforce a promissory note?

McGlinchey Stafford on

Shareholder Derivative Lawsuit Aungst v. Light, 9th Dist. Summit No. 29349, 2020-Ohio-3347 In this appeal, the Ninth Appellate District affirmed the trial court’s decision, finding that when a shareholder’s derivative...more

Carlton Fields

Florida Is Now a “Demand Futility” State for Shareholder Derivative Actions

Carlton Fields on

On January 1, 2020, the new Florida Business Corporation Act took effect. It includes a provision that settles in the affirmative whether Florida is a “demand futility” state for shareholder derivative litigation. To succeed...more

Skadden, Arps, Slate, Meagher & Flom LLP

Investment Management Update - September 2019

In this issue, we summarize regulatory, litigation and industry developments from May to September 2019 impacting the investment management sector, including SEC action on standards of conduct for broker-dealers and...more

Kramer Levin Naftalis & Frankel LLP

Delaware Supreme Court Allows Caremark Breach of Loyalty Claim To Go Forward

On June 18, in Marchand v. Barnhill, the Delaware Supreme Court reversed a ruling by the Delaware Court of Chancery in a shareholder derivative suit alleging a breach of the duty of loyalty. While the standard for a...more

Troutman Pepper

Non-Delaware PE Firms Should Be Aware of Potential Jurisdictional Hook

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In In re Pilgrim’s Pride Corporation Derivative Litigation, the Delaware Court of Chancery held that a foreign controlling stockholder impliedly consented to personal jurisdiction in Delaware because the controller’s...more

Robins Kaplan LLP

Your Daily Dose of Financial News

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Goldman’s deal-making advising is sputtering a bit these days, so Lloyd and the gang are working on generating some of those deals themselves through a new Innovations Lab internal venture....more

Carlton Fields

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

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

Burr & Forman

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

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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

Morris James LLP

The Court of Chancery Declines to Disturb Company’s “Waiver” of its Forum Selection Bylaw to Settle Derivative Action in...

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Many Delaware companies have adopted forum selection bylaws that prevent their stockholders from bringing internal corporate claims in courts outside of Delaware. These bylaws are a valid and effective tool for limiting...more

Morris James LLP

Chancery Applies 'Rales' in Dismissing Derivative Claim

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In Sandys v. Pincus, C.A. No. 9512-CB, (Del. Ch. Feb. 29, 2016), the Delaware Court of Chancery considered the uncommon scenario of analyzing whether a demand made upon Zynga Inc.'s board of directors pursuant to Rule 23.1...more

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