News & Analysis as of

Duty of Loyalty Shareholders Derivative Suit

Faegre Drinker Biddle & Reath LLP

The Corporate Guide: Rule 23.1 and Dealing With Stockholders Demanding Derivative Action

What should our board do first when served with a stockholder demand under Rule 23.1? • Directors must determine the legal, financial and factual issues relevant to the board’s response. ...more

Benesch

Shareholders Seek to Hold Current and Former SolarWinds Officials Liable for Massive 2020 Security Breach

Benesch on

Investors filed a derivative suit claiming that the company knew about, and failed to mitigate known, existing cybersecurity risks and shortfalls prior to the security breach. In early November, pension funds and...more

Goodwin

SEC’s Disgorgement Authority Expanded Under National Defense Authorization Act for Fiscal Year 2021

Goodwin on

SEC’s Disgorgement Authority Expanded Under National Defense Authorization Act for Fiscal Year 2021; Delaware Court of Chancery Rejects Derivative Claim Based On Deficient Anti-Money Laundering Compliance Efforts: “Bad...more

Proskauer - Minding Your Business

Delaware Chancery Holds Early Committee Appointment Necessary to Cleanse Conflict from Corporate Transactions

In Salladay v. Lev, the Delaware Chancery Court elaborated on how early a corporate board must take protective measures to shield a conflicted transaction from entire fairness review. Salladay involved a motion to dismiss a...more

McDermott Will & Emery

Court of Chancery Expands Stockholder Right to Corporate Books and Records

McDermott Will & Emery on

In a recent post-trial opinion, Vice Chancellor Laster of the Delaware Court of Chancery issued an important decision regarding stockholder books and records demands under Section 220(b) of the Delaware General Corporation...more

Morris James LLP

Court of Chancery Requires Bad Faith Disclosure Violations for Demand Futility

Morris James LLP on

Ellis v. Gonzalez, C.A. No. 2017-0342-SG (Del. Ch. July 10, 2018) - The pre-suit demand on the board requirement for derivative litigation usually is not excused solely by a sufficiently pled disclosure violation....more

Morris James LLP

Court Of Chancery Declines To Hold Unocal Claim Automatically Excuses Demand

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

BakerHostetler

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

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

Proskauer - Minding Your Business

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

Robinson+Cole Data Privacy + Security Insider

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

Katten Muchin Rosenman LLP

Delaware Chancery Court Permits Shareholder to Bring Fiduciary Claim for Board’s Violation of a Stock Incentive Plan

On November 8, the Delaware Chancery Court denied a motion to dismiss a derivative action brought by a shareholder of Healthways, Inc. against the company’s president, Ben Leedle, Jr., and the board of directors for approving...more

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