Fiduciary Duty, Common Stock

Delaware Court of Chancery Confirms Enforceability of NVCA Covenant Not to Sue for Breach of Fiduciary Duty

Troutman Pepper on 6/8/2023

In New Enterprise Associates 14, L.P. v. Rich, the Delaware Court of Chancery held that a covenant not to sue for breach of fiduciary duty, which was contained in a stockholder's agreement and modeled after the NVCA model...more

Delaware Court of Chancery Holds “MFW” Framework Applies to Controller Transaction Despite Substantially Higher Third-Party Offer

Dechert LLP on 1/24/2023

MFW protects controlling-stockholder transactions even when a third-party bidder makes a competing bid that is superior to a negotiated merger with the controller. A special committee will likely satisfy the duty of care...more

Brown v. Matterport: Court of Chancery addresses share transfer restrictions after de-SPAC merger - Corporate / M&A Decisions...

Hogan Lovells on 4/27/2022

In Brown v. Matterport, Inc., et al., C.A. No. 2021-0595-LWW (Del. Ch. Jan. 10, 2022), the Delaware Court of Chancery held that transfer restrictions restricting trade of stock “outstanding immediately” after a de-SPAC merger...more

A Gentle Reminder to Get Specific with Your General Releases

Farrell Fritz, P.C. on 6/11/2021

When someone releases another from claims, he is relinquishing his right to sue in connection with the subject of the release. So long as it is not procured by fraud, New York courts will generally enforce broad general...more

Delaware Bankruptcy Court Rules that Bankruptcy Blocking Right in Debtor's Corporate Charter Violates Federal Public Policy

Jones Day on 10/22/2020

Courts sometimes disagree over whether provisions in a borrower's organizational documents designed to prevent the borrower from filing for bankruptcy are enforceable as a matter of federal public policy or applicable state...more

ERISA Plan Controversy: Rising Stakes for Those Unprepared

McDermott Will & Emery on 3/22/2019

WHAT’S THE EXPOSURE? • Settlements up to $140 million • Last year alone, settlements of $17 million, $22 million, $24 million, and among others • Plaintiffs’ lawyers generally get 1/3 of the settlement amounts • Plaintiffs’...more

California Court of Appeal Enforces Delaware Forum Selection Bylaw

Sheppard Mullin Richter & Hampton LLP on 1/28/2019

In Drulias v. 1st Century Bancshares, Inc., No. H045049, 2018 WL 6735137 (Cal. App. Dec. 21, 2018), the California Court of Appeal, Sixth Appellate District, affirmed an order staying a stockholder lawsuit brought in the...more

Second Circuit Gives New Life to Stock Drop Claim

Seyfarth Shaw LLP on 12/19/2018

Seyfarth synopsis: The Second Circuit reversed dismissal of an ERISA stock drop class action finding plaintiff alleged enough to plausibly show that disclosure of alleged corporate problems would not have done more harm than...more

Court of Chancery Denies Director Access to Records in the Redstone-CBS Corp. Dispute

Morris James LLP on 7/17/2018

In re CBS Corporation, C.A. No. 2018-0342-AGB (Del. Ch. July 13, 2018) - It is well settled that members of the board of directors are entitled to essentially unfettered access to the corporation’s records to carry out...more

Venture Capital Firms and Their Portfolio Company Directors Face Risk of Liability for Conflicts of Interest

Foley & Lardner LLP on 4/30/2018

Venture capital firms and their director designees on portfolio company boards can find themselves stuck between their fiduciary duty to common shareholders and the terms of preferred investment documents. Before any other...more

Delaware Court Of Chancery Identifies Fiduciary Duty Constraints On Preferred Equity

Cole Schotz on 6/21/2017

A recent decision of the Delaware Court of Chancery (the “Court”) places certain fiduciary constraints on a company’s ability to satisfy its obligations to its preferred equity holders. While investors often seek to acquire...more

"New York Appellate Court Sets New Standard for Approving Nonmonetary and 'Disclosure-Only' Settlements"

Skadden, Arps, Slate, Meagher & Flom LLP on 2/22/2017

It has become a common phenomenon for the announcement of a significant merger transaction to be quickly followed by shareholder class action or derivative litigation challenging the terms of the transaction and the accuracy...more

Delaware Chancery Court Rejects MBO Merger Price as Best Evidence of Fair Value in Appraisal Proceeding

Sheppard Mullin Richter & Hampton LLP on 6/10/2016

In In re Appraisal of Dell Inc., No. 9322 VCL, 2016 Del. Ch. LEXIS 81 (Del. Ch. May 31, 2016) (Laster, V.C.), the Delaware Court of Chancery determined that the fair value of the common stock of Dell Inc. (“Dell” or the...more

Directors Designated By Venture Capitalists And Other Preferred Stockholders Need To Be Mindful Of Inherent Conflicts: In re...

Troutman Pepper on 9/5/2013

A recent post-trial decision by Vice Chancellor J. Travis Laster of the Delaware Court of Chancery puts directors serving as designees of preferred investors on notice that they must attempt to maximize value for common...more

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