Fiduciary Duty Board of Directors

News & Analysis as of

Goldman Sachs May Still Be Liable After Board's Fiduciary Duty Breach Exculpated

Section 102(b)(7) of the Delaware General Corporation Law permits a provision in a company's certificate of incorporation that exculpates directors from monetary liability for breaches of the fiduciary duty of care. By...more

Caspian Select Credit Master Fund Ltd. v. Gohl, C.A. No. 10244-VCN (Del. Ch. Sept. 28, 2015) (Noble, V.C.)

In this memorandum opinion, the Court of Chancery granted in part and denied in part a motion to dismiss direct and derivative claims against the company’s board and controlling stockholders for breaches of fiduciary duty...more

Court of Chancery Applies Business Judgment Standard Under New Supreme Court Precedent

This is an important decision that reverses a prior opinion in the same case. The Court did so because after it issued its prior opinion, the Delaware Supreme Court issued its Corwin decision holding that when a merger is...more

A Compilation of Enforcement and Non-Enforcement Actions

Non-Enforcement - SEC Decides Against Mounting an Appeal in Koch Ruling - The July 2015 ruling by the D.C. Circuit Court in Koch v. SEC will apparently not be challenged by the SEC. The Court ruled in that...more

Inside M&A - October 2015

Overview of SPACs and Latest Trends - A number of recent successful business combination transactions involving special-purpose acquisition companies (SPACs) led by prominent sponsors have driven a resurgence in the SPAC...more

Insights: The Delaware Edition - October 2015

We are pleased to share with you the inaugural issue of Insights: The Delaware Edition, a periodic publication addressing significant Delaware deal litigation and corporation law developments. In This Issue: - Q&A...more

"Delaware Supreme Court Reaffirms Important Protections for Corporate Directors"

A trio of opinions from the Delaware Supreme Court, each authored by Chief Justice Leo E. Strine, Jr., has reaffirmed Delaware’s deference to the business judgment of disinterested corporate decision-makers and restored...more

"Dole Ruling Serves as Cautionary Tale for Take-Private Deals"

Earlier this year, in a consolidated breach of fiduciary duty and appraisal action, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery issued a post-trial opinion that includes many important takeaways for...more

Delaware Court of Chancery Cautions Directors: Be Vigilant in Recognizing Advisor’s Conflict of Interests

Shareholders challenged the merger of Zale Corporation with Signet Jewelers Ltd. In a decision dated October 1, 2015, the Delaware Court of Chancery credited allegations that the board of directors of Zale breached its...more

Ninth Circuit Affirms Dismissal of '40 Act Section 36(b) Excessive Fee Action Against Davis

The U.S. Court of Appeals for the Ninth Circuit recently affirmed the dismissal of an amended complaint asserted by a shareholder of the Davis New York Venture Fund (the “Fund”) under section 36(b) of the Investment Company...more

Chancery Court Provides Lessons on Conflicts of Interest in a Sales Process – Holds Only Financial Advisor Open to Liability

In an October 1st decision (In re Zale Corporation), the Delaware Chancery Court dismissed claims that Zale Corporation’s directors breached their fiduciary duties in connection with Zale’s agreement to merge with Signet. ...more

A WARNing to Directors and Officers — Failure to give proper WARN Act notice may breach your fiduciary duty

At first glance, Stanziale v. MILK072011, looks like someone suing over a bad expiration date and conjures up images of Ron Burgundy proclaiming “milk was a bad choice.” But in actuality Stanziale is much more interesting: it...more

Financial Services Quarterly Report - Third Quarter 2015: Recent Developments in U.S. “Excessive Fee” Litigation

The U.S. mutual fund industry is poised to see significant developments in the ongoing wave of Section 36(b) “excessive fee” litigation. Days apart in August, the Seventh Circuit Court of Appeals affirmed the grant of summary...more

M&A Update: Fully Informed Vote of Disinterested Stockholders Results in Business Judgment Rule Protection in Post-Closing Review...

In an October 2, 2015 decision, Corwin, et al. v. KKR Financial Holdings LLC., et al., the Delaware Supreme Court clarified that once a merger closes, as long as it has been approved by a fully informed vote of the...more

Perspectives - September/October 2015

In a decision in which no opinion commanded a majority, the Ohio Supreme Court sided with a private entity — a charter school operator — in a dispute over the ownership of personal property purchased by the operator with...more

Do Public Pension Funds Breach Their Fiduciary Duties By Pursuing Social Issue Proposals?

Yesterday, UCLA Law School Professor Stephen Bainbridge noted the publication of a recent study that reaches some devastating conclusions for public pension funds.  The study by Professor Tracie Woidtke at the University of...more

Tyranny of the Minority: North Carolina Business Court Explores Potential Fiduciary Duties of Minority Shareholders

The North Carolina Business Court recently issued an opinion considering whether a minority shareholder can ever be considered a “controlling shareholder” who owes a fiduciary duty to other shareholders. The court’s opinion...more

Addressing Cybersecurity in Board Committee Charters

As boards of directors have become more focused on their fiduciary duties to oversee cybersecurity, new governance practices have begun to develop. For example, many companies have shifted cybersecurity oversight from the...more

Florida District Court Affirms Bankruptcy Court Bar Order In Favor Of Former Ds & Os

On September 24, Southern District of Florida District Court Judge James I. Cohn issued an opinion affirming an order approving the settlement of a debtor’s breach of fiduciary duty, corporate waste, and mismanagement claims...more

Fourth Circuit: Business Judgment Rule May Not Protect Bank Officers in FDIC Action

Why it matters - Bank officers may be liable in a lawsuit brought by the Federal Deposit Insurance Corp. (FDIC) while the directors escaped liability, in a new ruling from the Fourth Circuit Court of Appeals interpreting...more

Justice Friedman Allows Breach of Fiduciary Duty Claim to Proceed Against Corporate Directors Under Delaware Law

In AP Services, LLP v. Lobell et. al, No. 651613/2012, 2015 NY Slip Op 31115(U) (N.Y. Sup. Ct. June 19, 2015) (argued Feb. 21, 2014), Justice Friedman, applying Delaware Law, denied a motion to dismiss plaintiff AP Services,...more

Legal Considerations in Businesses’ Disaster Planning

In the last decade, Disaster Recovery (“DR”) and Business Continuity Planning (“BCP”) have become “hot” topics, as companies attempt to deal with disasters and the associated business risks. “Force majeure” is a legal concept...more

Delaware Court Holds Interested Directors Liable for "Fairer Price" In Going Private Transaction

In one of the largest ever M&A-related recoveries for shareholders, Vice Chancellor J. Travis Laster ordered Dole Food Company, Inc.’s Chairman and CEO, David Murdock, and Dole’s former President, COO and General Counsel, C....more

Good News for Compensation Committees

With executive compensation under fire from seemingly all directions these days, it’s nice to get some good news occasionally. In this case, that news comes via the Delaware Chancery Court’s recent decision in Friedman v....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

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