Fiduciary Duty Directors

News & Analysis as of

SEC and DOJ Charge Board Member with Trading on Inside Information . . . During a Board Meeting

On Friday, the SEC filed a complaint against James C. Cope, a former member of the Executive Committee of Pinnacle Financial Partners’ (“PFP”) board of directors, alleging that he engaged in insider trading. The same day,...more

Court Of Chancery Holds Revlon Does Not Apply In Dissolution

This decision holds that Revlon duties are not implicated by a decision to liquidate a company. Hence, the Court will not scrutinize whether the board sought to get the best possible deal for company assets....more

Court of Chancery Denies Director Full Inspection Rights

This is an almost unprecedented decision to limit the inspection rights of a corporate director. Directors generally have “essentially unfettered” access to the corporate records to fulfill their fiduciary roles. ...more

Chancery Court Denies Motion to Dismiss Fiduciary Duty Claims Where Directors Approved Merger That Extinguished Threatened...

On July 28, 2016, the Delaware Court of Chancery held that stockholders of Riverstone National, Inc. had adequately stated a breach of fiduciary duty claim against the company's directors who approved a merger that...more

SEC Approves Nasdaq “Golden Leash” Disclosure Rule

On July 1, 2016, the Securities and Exchange Commission approved Nasdaq’s proposal for a “golden leash” disclosure rule (Rule 5250(b)(3)) requiring listed companies to publicly disclose benefits given by investors or other...more

An Analysis of Nasdaq’s “Golden Leash” Disclosure Rule

On July 1, 2016, the Securities and Exchange Commission (SEC) approved, on an accelerated basis, Nasdaq’s new Rule 5250(b)(3), which requires Nasdaq-listed U.S. companies to publicly disclose any arrangements or agreements...more

Bankruptcy Courts Closing In – Will An Agreement Requiring Unanimous Consent To File For Bankruptcy Be Effective?

We’ve all seen it. The business opportunity looks enticing but is laced with risk about a potential bankruptcy filing down the road. As bankruptcy lawyers we are often asked how deals can be structured to prevent a...more

Blog: DE Court Comments on Block-Holder Rights in OptimisCorp

The Delaware Supreme Court issued an Order this week in OptimisCorp v. Waite that could have implications for VC-backed or other companies with so-called “block-holder” directors – or directors who are appointed by a...more

A Compilation of Non-Enforcement and Enforcement Actions

Non-Enforcement - Mutual Fund Directors Must Be Vigilant in Addressing Risks - In remarks to the Mutual Fund Directors Forum, SEC Chair Mary Jo White outlined some of the risks and challenges that mutual fund...more

Managing Cybersecurity Risk for Nonprofit Organizations: A Fiduciary Duty?

We live in an era of increasingly prevalent cybercrime, and nonprofits are in the crosshairs.  Harvard University, Penn State University and two BlueCross BlueShield entities are just a few nonprofit organizations that...more

Director Duties: 2016 Amendments to the Maryland General Corporation Law and Maryland REIT Law

On April 26, 2016, Governor Hogan signed House Bill 354 (chapter 171), which amends the Maryland General Corporation Law (the “MGCL”) to clarify that a director of a Maryland corporation only has an obligation to comply with...more

A Compilation of Enforcement and Non-Enforcement Actions

Non-Enforcement - Remember to Update Your Risk Disclosure on an Ongoing Basis - The staff of the Securities and Exchange Commission (SEC) issued guidance reminding mutual funds, exchange traded funds, and other...more

2015 Georgia Corporation and Business Organization Case Law Developments

This survey covers the legal principles governing Georgia businesses, their management and ownership. It catalogs decisions ruling on issues of corporate, limited liability company and partnership law, as well as transactions...more

Blog: How to Handle Changes on Your Board of Directors

Board members tend to stay with companies for a relatively long time, but, like employees, sometimes it makes sense for a board member to leave. Here is what I try to do when a board member departs: - Clear...more

Court Holds That An Officer Can Negotiate New Employment Without Breaching Fiduciary Duties

In Great American Food Chain, Inc. v. Andreottola, a corporate officer and director negotiated and accepted employment with a competitor while still employed with his prior employer. No. 3:14-CV-1727-BK, 2016 U.S. Dist. LEXIS...more

Court Of Chancery Explains Director Right To Information And What Communications Qualify As Corporate Books and Records

This is one of those scarce cases dealing with director access to a corporation’s books and records. After all, Delaware law provides directors with an almost unlimited right to a corporation’s records needed for them to...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

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

Three Recent Delaware Decisions Highlight the Importance of Director Independence and Risks for M&A Financial Advisors

On September 28 and October 1, 2015, the Delaware Court of Chancery issued decisions in Caspian Select Credit Master Fund Limited v. Gohl, C.A. No. 10244-VCN and In re Zale Corporation Stockholders Litigation, C.A. No....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

Court Poised To Decide Whether Directors Are Agents

Not quite four years ago, I wrote about whether directors are agents. The post was prompted by then Chancellor William B. Chandler III’s assertion...more

Delaware Expands Jurisdiction Over Directors

A recent but little-known decision by a Delaware court may have substantially expanded the state's jurisdiction over the directors of a Delaware corporation. Delaware has long had a director-consent-to-service statute: 10...more

Court Rules Unincorporated Association Aided Director’s Breach Of Fiduciary Duty

Nearly four years ago, I devoted this post about California’s Unincorporated Association Law. Typically, an unincorporated association is a club, church, or other social organization. A criminal street gang might also be an...more

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