Minority Shareholders

News & Analysis as of

Texas Supreme Court Denies Minority Shareholder’s Oppression Claims

On June 20, the Texas Supreme Court ruled that courts are not authorized to order closely held corporations to buy out a minority shareholder’s interests under state law, and that no common-law cause of action exists for...more

Business Litigation Alert: Texas Supreme Court Update - New Ruling Restrains Minority Shareholder Oppression Claims

The Texas Supreme Court recently issued its decision in Ritchie v. Rupe, a case that essentially eliminates the continuing viability of claims for minority shareholder oppression in Texas. The case involved a dispute over a...more

Delaware Court of Chancery Applies Entire Fairness Standard to Going-Private Transaction with a Controlling Stockholder Negotiated...

In In re Orchard Enterprises, Inc. Stockholder Litigation, the Delaware Court of Chancery held that the entire fairness standard of review applied to a going-private transaction with a controlling stockholder, even though the...more

Texas Supreme Court weekly orders (6/14)

In its order list for June 20, 2014, the Texas Supreme Court issued opinions in eight cases and granted review in one case. In this post, I will summarize the opinions in four cases, and also describe the case in which the...more

Corporate and Financial Weekly Digest - Volume IX, Issue 25

In this issue: - Delaware Court of Chancery Rules That a Major Debt Holder and 48 Percent Stockholder Is a Controlling Stockholder and Owes Fiduciary Duties to Minority Stockholders - Delaware Court of Chancery...more

The M&A Word of the Day® from the Book of Jargon® – Global Mergers & Acquisitions Is Squeeze Out [Video]

Latham & Watkins partner Olivier du Mottay explains the M&A term Squeeze Out, the right of the bidder in a public to private/takeover to require minority shareholders to sell their shares to the bidder once it has reached a...more

New UK Financial Conduct Authority Delisting Requirements

Changes to FCA Listing Rules increase requirements for delisting a premium listed company with a controlling shareholder. On 1 May 2014, the UK’s Financial Conduct Authority (FCA) announced changes to Listing Rule 5,...more

Poison Pills with Lower Ownership Thresholds for Activist Investors Come Under Attack

On March 25, 2014, Daniel Loeb’s Third Point LLC filed suit against Sotheby’s and its directors in Delaware’s Court of Chancery to invalidate Sotheby’s poison pill. The board of Sotheby’s adopted the poison pill this past...more

M&A Update: Ohio Federal Judge Blocks Controlling Stockholder’s Tender Offer Based On Target Board’s Conflicts and Stockholder...

In a March 14, 2014 decision that has received little commentary, an Ohio federal court in Spachman v. Great American Insurance Co. took the extraordinary step of enjoining a tender offer by Great American Insurance, a...more

Delaware Supreme Court Tells Controlling Shareholders “If You Look Out For Your Minority, We’ll Look Out For You”

On March 14, 2014, the Delaware Supreme Court unanimously affirmed an important Delaware Court of Chancery decision issued in 2013 that offered a roadmap to companies and their directors on how to obtain the protections of...more

Delaware Supreme Court Affirms Criteria for Applying the Business Judgment Rule to Controlling Stockholder Going-Private...

In Kahn, et al. v. M & F Worldwide Corp., et al., 2014 WL 996270 (Del. Mar. 14, 2014), the Delaware Supreme Court unanimously affirmed that, when certain procedural safeguards are implemented at the outset of negotiations, a...more

Frank v. Elgamal, C.A. No. 6120-VCN (Del. Ch. Mar. 10, 2014) (Noble, V.C.)

In this memorandum opinion, the Court of Chancery granted in part and denied in part defendants’ motion for summary judgment as to certain claims asserted by a stockholder plaintiff in connection with a merger involving a...more

M&F Worldwide: Delaware Supreme Court Upholds Business Judgment Review In Controlling Stockholder Transaction

When a controlling stockholder’s buyout of a company has been challenged by minority stockholders, Delaware courts have generally subjected the transaction to entire fairness review, the most rigorous standard of review in...more

The Impact of Kahn v. M&F Worldwide Corp.: Delaware Supreme Court Affirms That Business Judgment Review Applies to Properly...

In Kahn v. M&F Worldwide Corp., the Delaware Supreme Court unanimously affirmed the Court of Chancery’s decision that the more deferential business judgment rule standard of review, rather than an entire fairness standard of...more

Kahn v. M&F Worldwide Corp., C.A. No. 6566 (Del. Mar. 14, 2014)

In this en banc decision, the Delaware Supreme Court affirmed the Court of Chancery’s decision to grant summary judgment to the defendants and addressed an issue of first impression: what standard of review will apply where a...more

Negotiating Style Causes Trouble in Delaware Minority Buyout

For majority stockholders in Delaware companies, the complications and added expenses often caused by minority stockholders may result in a decision to buy out that minority, simplify the company’s capital structure and...more

Delaware Supreme Court Confirms The Path to Business Judgment Review In Controlling Stockholder Transactions

On March 14, 2014, the Delaware Supreme Court issued its eagerly-awaited decision in Kahn v. M&F Worldwide Corp., No. 334, 2013 (Del. March 14, 2014). The Court affirmed the Chancery Court's holding (Strine, C.) that the...more

M&A Update: Delaware Court’s Orchard Enterprises Decision Provides Key Insights For Special Committees In Controlling Stockholder...

On March 14, 2014, the Delaware Supreme Court upheld the Court of Chancery’s 2013 decision in In re MFW Shareholders Litigation, holding that in going-private mergers where there is a controlling stockholder, the use of both...more

Delaware Upholds Business Judgment Review for Controlling Stockholder Mergers If Minority Is Protected

On Friday, March 14th, the Delaware Supreme Court held that controlling stockholder mergers should be subject to deferential business judgment review, rather than the more stringent entire fairness standard, where minority...more

Delaware Supreme Court Affirms Application of Business Judgment Review to Merger with Controlling Stockholder

In Kahn v. M&F Worldwide Corp, the Delaware Supreme Court unanimously affirmed the Court of Chancery's 2013 decision that a going-private merger with a controlling stockholder may be subject to the deferential business...more

M&A Update: Delaware Supreme Court Upholds Business Judgment Rule Review For Certain Controlling Stockholder Transactions With...

On March 14, 2014, the Delaware Supreme Court upheld the Court of Chancery’s 2013 decision in In re MFW Shareholders Litigation, holding that in going-private mergers where there is a controlling stockholder, the use of both...more

Delaware Supreme Court Confirms That Appropriate Procedural Safeguards Will Result In Business Judgment Review Of Going-Private...

In a 2013 decision, the Delaware Court of Chancery ruled that the business judgment standard of review should apply to a going-private transaction where certain procedural safeguards were implemented to protect minority...more

Delaware Supreme Court: No Duty to Buy Out Minority Shareholders in Closely Held Corporations

The Delaware Supreme Court recently considered whether the directors of a closely held corporation had a duty under common law fiduciary principles to repurchase a minority shareholder’s shares. The court also considered...more

Delaware Supreme Court Holds That a Minority Stockholder Has No Common Law Right to a Conflict-Free Board Decision Regarding the...

In Blaustein v. Lord Baltimore Capital Corp., No. 272, 2013, 2014 Del. LEXIS 30 (Del. Jan. 21, 2014), the Delaware Supreme Court held that a closely-held corporation’s directors owe no fiduciary duty to decide, free from...more

Highlights From 2013 And Implications For 2014

During 2013 shareholder activism continued to surge and impact corporate-decision making. The Delaware courts also handed down several significant rulings during the year. ...more

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