Fiduciary Duty

News & Analysis as of

Hedge Funds and Material Nonpublic Information: The Role of Deception, Duty, Breach, Personal Benefit and Knowledge in Creating...

The last thing hedge funds need is another wake up call about the risks of liability for trading on the basis of material nonpublic information. But if they did, a July 17 article in the Wall Street Journal would provide it....more

Washington Insurance Law 2014 Mid-Year Update

During the first six months of 2014, Washington judges issued several notable insurance-related decisions. Some of those decisions were favorable to insurers and could benefit insurers in future insurance claims and lawsuits...more

Is Attorney-Client Privilege Affected By Who Pays Counsel Fees?

After receiving great interest from our “Fiduciary Exception to the Attorney-Client Privilege” article, we provide this follow-up article to address a possible “exception to the exception” that may still protect documents...more

Perspectives - Fall 2012 Volume 3, Edition 2: An Executive Compensation, Benefits & Human Resources Law Update

In this Issue: - Don’t “Moench”ion It: Supreme Court Rejects Presumption of Prudence for ESOP Fiduciaries - Avoiding Claims of Excessive Fund Fees - Risk of ERISA Class Actions Can Be Reduced by Use of...more

The Latest on the Use of Retained Asset Accounts to Pay Life Insurance Benefits

In Merrimon v. Unum Life Insurance Co. of America, 2014 WL 2960024 (1st Cir. July 2, 2014), the U.S. Court of Appeals for the First Circuit became the third circuit court to approve an insurance company’s use of a retained...more

Delaware Court Dismisses Shareholder Class Action Suit Attacking Corporate Merger

Almost every proposed corporate merger is met with a shareholder suit against the acquiring company, merger target and the target’s board of directors in which the shareholders assert that the board breached its fiduciary...more

The Ropes Recap: Mergers & Acquisition Law News - Second Quarter 2014

In this issue: -Delaware Legislative Update -Delaware Supreme Court Upholds Facial Validity of Fee-Shifting Provisions in Bylaws of Delaware Non-Stock Corporation -News from the Courts: -Court...more

U.S. Supreme Court Changes Fiduciary Rules for Retirement Plans with Employer Stock

A recent U.S. Supreme Court decision affects fiduciaries of retirement plans that have investments in employer stock. In the decision, the Supreme Court held that a retirement plan fiduciary is not entitled to a presumption...more

NC Supreme Court Reminds Court of Appeals That Typical Lender-Borrower Relationship is Not a Fiduciary One

The North Carolina Supreme Court recently reaffirmed that a run-of-the-mill lender and borrower are not fiduciaries, reversing the Court of Appeals decision that would have this issue to go to the jury. The case is Dallaire...more

Chancery Court Provides Additional Room for Shareholders Challenging Change of Control Transactions

What you need to know: In its recent decision in Chen v. Howard-Anderson, Delaware’s Court of Chancery held that directors and officers may be found to have acted in bad faith, thereby breaching their fiduciary duty of...more

Supreme Court Rejects “Presumption of Prudence” in ESOP Cases

On June 25, 2014, the Supreme Court issued a decision in Fifth Third Bancorp v. Dudenhoeffer regarding the availability of relief against fiduciaries of an employee stock ownership plan (“ESOP”) for alleged breaches of the...more

Uniform Fiduciary Access to Digital Assets Act (UFADAA)

On July 16, 2014, the Uniform Fiduciary Access to Digital Assets Act (UFADAA) was passed by the Uniform Law Commission. My colleague Gene Hennig and I originally proposed this uniform law in May of 2011, and I’m very happy...more

Recent Practical Effects of “Just Saying No”

In the past few months, we have seen an increasing number of hostile or unsolicited M&A bids where boards of directors of target companies have resisted bidders’ advances. Traditionally, the board-friendly Delaware approach,...more

Appellate Court Notes

AC35632- U.S. Bank, N.A. v. Foote - Second time is the charm. Defendant succeeded in getting plaintiff’s foreclosure action dismissed for lack of standing due to the inability of the witnesses to establish that the...more

What Should the Trustee of a Private ESOP Do?

The Department of Labor (DOL) recently entered into an agreement with GreatBanc Trust Company settling claims relating to its service as trustee of an employee stock ownership plan (ESOP) holding stock of a private company....more

Employee Benefits Update: Unanimous Supreme Court Issues ERISA Fiduciary Duty Opinion

On June 25, the Supreme Court issued a unanimous decision in Fifth Third Bancorp v. Dudenhoeffer, which is likely to change the future of the Employee Retirement Income Security Act (ERISA) stock drop litigation. ...more

Dent v. Ramtron Int’l Corp., C.A. No. 7950-VCP (Del. Ch. June 30, 2014) (Parsons, V.C.)

In this memorandum opinion, the Court of Chancery granted the defendant’s motion to dismiss the plaintiff’s claims that defendants breached their fiduciary duties in connection with the sale of the defendant-corporation to a...more

Top Ten Things You Need to Know About the Advisers Act

The Investment Advisers Act of 1940 (the Act) is the rulebook for SEC-registered investment advisers (RIAs). The Advisers Act, together with the related rules adopted by the SEC under it, lays down the groundwork as to...more

Business Litigation Reporter -- June 2014

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

U.S. Supreme Court Abolishes the Presumption of Prudence in ERISA Stock Drop Cases

A recurring scenario in ERISA litigation involves claims against fiduciaries of 401(k) retirement plans who are alleged to have breached their fiduciary duty by failing to discontinue investment in employer stock following a...more

Reverse Churning: Don't Fall Asleep at the Wheel

It is obvious that broker-dealers and their registered representatives, and investment advisors, must be careful in making recommendations to clients. But the recent increase in regulatory interest relating to inaction in a...more

Supreme Court Rejects Presumption of Prudence for ESOP Fiduciaries

On June 25, 2014, the Supreme Court of the United States, in Fifth Third Bancorp v. Dudenhoffer, declared that no “presumption of prudence” applied to fiduciaries of “employee stock ownership plans” (ESOPs). ...more

Pro Se Defendant Wins Trial On Breach Of Fiduciary Duty Claims In Business Court

When I was a young pup preparing to go to court against the uncommon adversary who was proceeding without a lawyer, I would joke that "I hope I don't lose." Luckily, I never did....more

Cambridge Ret. Sys. v. Bosnjak, C.A. No. 9178-CB (Del. Ch. June 26, 2014) (Bouchard, C.)

In this memorandum opinion, the Court of Chancery granted in part and denied in part the defendants’ motion to dismiss for failure to make a pre-suit demand on the board and for failure to state a claim, holding that demand...more

ESOP Fiduciaries Not Entitled to Presumption of Prudence

In Fifth Third Bancorp v. Dudenhoeffer, the U.S. Supreme Court unanimously held that there is no presumption of prudence for fiduciaries of an employee stock ownership plan (ESOP) who invest in employer securities. The case...more

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