Shareholder Litigation

News & Analysis as of

Counsel to the Company: A Framework for Corporate Governance

As a threshold matter, counsel must identify, and remain clear as to, the identity of its client, which may be the company or a subsidiary, the Board or Board committee, or one or more executives. The identity of the client...more

Ritchie v. Rupe

The Texas Supreme Court, on June 20, 2014, issued its highly anticipated opinion in Ritchie v. Rupe, 2014 Tex. LEXIS 500 (Tex. 2014). Ritchie involved a claim by a minority shareholder in a closely held corporation under the...more

Texas Supreme Court Rejects a General Cause of Action for Minority Shareholder Oppression

The Supreme Court of the State of Texas recently issued a significant opinion relating to the remedies available to minority shareholders of Texas corporations. In Ritchie v. Rupe, No. 11-0447 (Tex. June 20, 2014), available...more

The Troubled Track Record of the Proxy Strike Suit

The recent wave of proxy strike litigation, once thought to be on the rise in 2012 and 2013, has now gone two years without a significant court victory. After one notable early success, decision after decision has gone...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

Federal Court Rejects Court Of Chancery’s Privity Analysis

Two years ago, I wrote about La. Mun. Police Emples. Ret. Sys. v. Pyott, 46 A.3d 313 (Del. Ch. 2012) in which Vice Chancellor J. Travis Laster refused to give preclusive effect to federal district court’s dismissal of a...more

In re TriQuint Semiconductor, Inc. S'holders Litig., C.A. No. 9415-VCN (Del. Ch. Jun. 13, 2014) (Noble, V.C.)

In this letter opinion denying plaintiffs’ motion to expedite, the Court of Chancery held that plaintiffs, shareholders of TriQuint Semiconductor, Inc. (“TriQuint” or the “Company”), failed to assert a colorable claim that...more

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

Federal Court Rules Boilermakers Didn’t Decide All Issues And Orders Company To File A Form 8-K

At first glance, the plaintiff’s position in Bushansky v. Armacost, 2014 U.S. Dist. LEXIS 88072 (N.D. Cal. June 25, 2014) seems a bit peculiar. The plaintiff had filed suit challenging Chevron Corporation’s adoption of an...more

Corporate and Financial Weekly Digest - Volume IX, Issue 26

In this issue: - Delaware Fee-Shifting Legislation Delayed - SEC Orders Securities Exchanges and FINRA to Develop Tick Size Pilot Plan - CFTC Extends Relief to FCMs from Certain Commingling...more

Flaa v. Montano, C.A. No. 9146-VCG (Del. Ch. May 29, 2014) (Glasscock, V.C.)

In this post-trial decision in a proceeding pursuant to 8 Del. C. § 225, the Court of Chancery invalidated stockholder action by written consent on the ground that the proxy solicitation materials failed to disclose an...more

Ravenswood Investment Co., L.P. v. Winmill & Co., C.A. No. 7048-VCN (Del. Ch. May 30, 2014) (Noble, V.C.)

In this decision in a proceeding pursuant to 8 Del. C. § 220, the Court of Chancery held that a corporation cannot condition a stockholder’s access to its nonpublic financial statements on the stockholder’s agreement not to...more

"Navigating Today’s Shareholder Activism Landscape: What Companies Should Consider"

Shareholder activism is the corporate topic du jour, be it in boardrooms, the media or Washington, D.C. While corporate boards and management need to understand the current environment and how we got here, their top priority...more

Is Proxy Disclosure Shareholder Litigation on Executive Compensation Finally Over?

Since the advent of “Say-on-Pay” over three years ago, the plaintiffs’ securities bar has attempted to rustle up claims relating to executive compensation matters discussed in proxy statements. The first wave against those...more

Exclusive Forum Provisions: A New Item for Corporate Governance and M&A Checklists

Public companies increasingly are adopting “exclusive forum” bylaws and charter provisions that require their stockholders to go to specified courts if they want to make fiduciary duty or other intra-corporate claims against...more

Biolase v. Oracle Partners, L.P., C.A. No. 9438 (Del. June 12, 2014)

In this expedited appeal from a post-trial decision of the Court of Chancery, the Delaware Supreme Court affirmed the Court of Chancery’s holding that, under 8 Del. C. § 141(b), directors may resign by verbal statements,...more

Bishop Gassis v. Corkery, C.A. No. 8868-VCG (Del. Ch. May 28, 2014) (Glasscock, V.C.)

In this post-trial decision in a proceeding pursuant to 8 Del. C. § 225, the Court of Chancery held that the board of the Sudan Relief Fund, Inc. (the “Fund”), a charitable corporation, validly removed the plaintiff as a...more

Delaware Court of Chancery Rules That a Major Debt Holder and 48 Percent Stockholder Is a Controlling Stockholder and Owes...

In Hamilton Partners, L.P. v. Highland Capital Management, L.P., the Delaware Court of Chancery denied a motion to dismiss breach of fiduciary duty claims brought by former stockholders of American Home Patient, Inc. (AHP)...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

Oracle Partners, L.P., v. Biolase, Inc., C.A. No. 9438-VCN (Del. Ch. May 21, 2014) (Noble, V.C.)

In this post-trial memorandum opinion, the Court of Chancery ruled on the board composition of Defendant and Counter-Plaintiff Biolase, Inc. (“Biolase”). The Court declared that only one of two contested director...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

If Fee-Shifting Bylaws Are Ever Put On Trial, This Case Should Be Exhibit A

Item 5.07(d) of Form 8-K requires issuers to disclose “the company’s decision in light of such vote as to how frequently the company will include a shareholder vote on the compensation of executives in its proxy materials...more

Protecting the Financial Services Firm as a Stakeholder: the Interpleader Action Defined (Part 1)

Financial services firms oftentimes can find themselves in the unenviable position of being in the middle of a dispute over money or property held by their clients. If two or more parties assert competing claims to the...more

Genzyme First Circuit Decision

In a huge victory for Massachusetts-based biologics manufacturer Genzyme Corporation, the First Circuit Court of Appeals on June 5, 2014 affirmed the District Court’s dismissal of a multi-million dollar shareholder class...more

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