Shareholder Litigation

News & Analysis as of

UK Decision Highlights Potential Privilege Problems in Cross-Border Investigations

7 steps companies can take to maximize privilege protections under US and English law. Key Points: ..In a recent case, an English court stated that privilege did not apply to notes of employee interviews,...more

Court Of Chancery Explains Class Distribution Procedures

Distributing the proceeds from a class action settlement is not as easy as you might think. Tracing ownership is complicated by the use of various intermediaries such as Cede & Co. This decision explains why that is so and...more

Court Of Chancery Explains When To Appoint Corporate Custodian

On the same day the Delaware Supreme Court affirmed the widely-reported TransPerfect decision, which ordered the sale of a successful company by custodian under Section 226 of the DGCL in order to break deadlock, the Court of...more

An Oppression How-To: Revoke Employment, Profit Sharing and Control

An earlier post on this blog, examining a post-trial decision in Matter of Digeser v Flach, 2015 NY Slip Op 51609(U) [Sup Ct Albany County Nov. 5, 2015], described the minority shareholder’s dissolution claim under Section...more

Stockholder Merger Vote Sets High Bar for Post-Closing Claims

The Delaware Supreme Court's decision in Corwin v. KKR Financial Holdings , 125 A.3d 304 (Del. 2015), reaffirmed the power of fully-informed, uncoerced, disinterested stockholder approval to immunize M&A transactions against...more

Delaware Supreme Court Affirms The TransPerfect Decision

The Supreme Court has affirmed the Court of Chancery decision that Section 226 of the DGCL permits the Court to appoint a custodian to sell a Delaware corporation when the board of directors and stockholders are deadlocked...more

Biogen to Pay Forward $1.25 Billion in Settlement

Forward Pharma A/S (“Forward”) recently announced that a necessary super majority of its shareholders have approved a settlement of various patent disputes with two wholly-owned subsidiaries of Biogen Inc. (“Biogen”) in which...more

2016 Securities and M&A Litigation Year in Review

Wilson Sonsini Goodrich & Rosati is pleased to present its 2016 Securities and M&A Litigation Year in Review. This report covers some of the major developments in securities and M&A litigation over the past year....more

First Department Opens the Door a Bit Wider to “Disclosure-Only” Settlement Agreements in Class Action Cases

On February 2, 2017, the New York Supreme Court, Appellate Division, First Department, approved a “disclosure-only” settlement agreement in Gordon v. Verizon Communications, Inc., 2017 N.Y. App. Div. LEXIS 740 (1st Dep’t Feb....more

First Department Adds Two New Factors to New York’s Standard of Review for Non-Monetary Settlements of Shareholder Class Actions

On February 2, 2017, the Appellate Division, First Department issued a unanimous decision in Gordon v. Verizon Communications, Inc., No. 653084/13, 2017 BL 31251 (1st Dep’t Feb. 2, 2017) that may have significant consequences...more

Pleading Failures Doom Disclosure Claims in Short-Form Merger Case

Vice Chancellor Tamika R. Montgomery-Reeves of the Delaware Court of Chancery (the “Court”) issued a Memorandum Opinion on January 4, 2017, dismissing a lawsuit arising from a short-form merger involving United Capital...more

Delaware corporate law and litigation: what happened in 2016 and what it means for you in 2017

Delaware has long been known as the corporate capital of the world, and it is now the state of incorporation for 66 percent of the Fortune 500 and more than half of all companies whose securities trade on the NYSE, Nasdaq and...more

Gordon v. Verizon: New York Parts Company with Delaware

On February 2, 2017, the New York Appellate Division, First Department, issued a decision in Gordon v. Verizon Communications, Inc., No. 653084/13, 2017 WL 442871 (1st Dep’t 2017), approving the settlement of litigation over...more

NC Bar on Notice: Business Court May Increase Scrutiny for Approval of Disclosure-Only Class Action Settlements & Attorneys’ Fees

Rolling into the new year, North Carolina attorneys are on notice that the ability to gain approval of class action settlements and related attorneys’ fees may become more difficult in some cases. In recent years, we have...more

"Key Developments in Delaware Corporation Law in 2016"

Significant changes in Delaware merger litigation and settlement practice in 2016, as well as noteworthy case law developments and trends, will continue to affect merger parties and litigants in 2017 and beyond....more

SEC/SRO Update: New Governance Focus—Director Compensation; The Time Is Now... Check Your Severance Agreements

The corporate governance focus has traditionally been on executive compensation, rather than on director compensation. Compensation Discussion and Analysis and executive compensation tables in proxy statements, say-on-pay...more

Yahoo! Data Breach Results in Another Lawsuit Against Corporate Directors and Officers

A number of claims have been made against companies’ directors and officers alleging a breach of fiduciary duty for failing to adequately oversee data security programs. To date, the defendants’ oversight of the programs and...more

Maryland’s Highest Court Clarifies Application of Boland Heightened Scrutiny to Shareholder Demand Response

In a “sweet” decision for corporate boards, on January 20, 2017, Maryland’s highest court ruled in Oliveira v. Sugarman that the decision of the full board to refuse a shareholder demand is not subject to the heightened...more

Ninth Circuit Holds That Securities Class Action Based on Violations of Ethics Code Properly Dismissed

On January 19, 2017, the Ninth Circuit affirmed the dismissal of a shareholder class action lawsuit alleging securities fraud violations, arising out of Hewlett-Packard’s former CEO’s alleged misrepresentations about HP’s...more

Delaware Corporate and Commercial Case Law Year In Review – 2016

Morris James attorneys Lewis Lazarus, Albert Manwaring and Albert Carroll authored an article published in Transaction Advisors titled Delaware Corporate and Commercial Case Law Year in Review – 2016. The article summarizes...more

Commercial Division Grants Preliminary Injunction in Shareholder Dispute

On January 6, 2017, Justice Charles E. Ramos of the Commercial Division issued an order enjoining two corporations from taking action in violation of a shareholders agreement of a third company. The case, Ciment v. SpanTran,...more

Race to Courthouse in Shareholder Derivative Actions Could Raise Due-Process Issues

The Delaware Supreme Court requested further consideration of the federal due-process issues that might arise where a court is asked to hold that a shareholder derivative action is precluded because a prior derivative action...more

Beware of Conflicting Interest Transactions in Family Business Management

Directors of all corporations – including family owned businesses – owe a fiduciary duty of loyalty to the company. This duty requires a director to put the interests of the company ahead of his or her personal interest and...more

9th Circuit Holds Insured vs. Insured Exclusion Applicable to Claims Brought by FDIC

In its recent decision in FDIC v. BancIsure, Inc., 2017 U.S. App. LEXIS 452 (Jan. 10, 2017), the United States Court of Appeals had occasion to consider the scope of an insured vs. insured exclusion in the context of...more

Delaware Chancery Court Confirms the Invalidity of Fee-Shifting Bylaws for Stock Corporations

In Solak v. Sarowitz, C.A. No. 12299-CB (Del. Ch. Dec. 27, 2016), the Delaware Court of Chancery held that plaintiff stated a claim that a stock corporation’s fee-shifting bylaw was facially invalid under Section 109(b) of...more

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