Shareholder Litigation

News & Analysis as of

Marquee Energy Appeal Reaffirms Plans of Arrangement Law in Canada

In a decision released on November 15, 2016, the Alberta Court of Appeal allowed the appeal of Marquee Energy Ltd. (Marquee) from a prior decision of the Court of Queen's Bench of Alberta which had required, as a condition to...more

How Does One Know When A Corporation Is Antagonistic?

When a shareholder files a derivative suit in state court, the defendants often will try to have the case removed to the federal district court. Federal courts, however, are courts of limited jurisdiction and not every...more

Delaware Court of Chancery Dismisses Derivative Suits Alleging Directors Wrongfully Refused Litigation Demands

Seyfarth Synopsis: On November 30, 2016, The Delaware Court of Chancery dismissed two derivative suits filed on behalf of the Bank of New York Mellon (“BNYM”). The companion memorandum and letter opinions reaffirm the heavy...more

Claims That Controlling Stockholder Received Unique Benefits Dismissed

In GAMCO Asset Management v. iHeartMedia, Delaware's Court of Chancery considered claims that a controlling stockholder's liquidity needs created conflicts in otherwise arm's-length transactions with third parties. As...more

“Directors’ Decisions Must Be Reasonable, not Perfect” Home Depot’s Shareholder Derivative Litigation Arising from Data Breach...

On November 30, 2016, a federal district court dismissed a shareholder derivative complaint against various current and former directors of Home Depot arising from the well-publicized data breach the company suffered between...more

The Death of Merger Litigation Part II – The North Carolina Business Court Puts a Nail in the Coffin

In a recent article entitled “The Death of Merger Litigation?”, we wrote about the Delaware Court of Chancery’s increasing refusal to approve disclosure-only settlements in shareholder lawsuits challenging public company...more

Delaware Supreme Court Finds Pre-Suit Demand Was Excused

When a stockholder files a derivative suit she can avoid dismissal under Rule 23.1’s pre-suit demand-on-the-board requirement by showing that a majority of the directors were not independent enough to fairly consider her...more

The ERISA Litigation Newsletter - November 2016

This month we review a recent Second Circuit decision addressing ERISA plan status as a class member in a securities shareholder class action. As discussed in the article, the decision exposes a potential conflict among the...more

Plan of Arrangement: A Vote for All? Not So, Says Court of Appeal

In Smoothwater Capital Corporation v. Marquee Energy Ltd. (Smoothwater), the Alberta Court of Appeal (Court) overturned the Alberta Court of Queen’s Bench controversial decision granting shareholders of an acquiring company a...more

Keep Looking Forward: Federal Court Holds Company’s Bad Legal Predictions Protected by PSLRA’s Safe Harbor

In a comprehensive tour of the Private Securities Litigation Reform Act’s (“PSLRA”) safe-harbor provisions, on November 22, 2016, a federal court in Massachusetts dismissed a shareholder class-action lawsuit against Neovasc,...more

Supreme Court of Canada Revisits Oppression

A corporation's failure to follow legal formalities under the Canada Business Corporations Act, RSC 1985 c C-44 [CBCA] does not, by itself, establish oppression, the Supreme Court recently held in Mennillo v Intramodal inc.,...more

The End of Disclosure-Only Settlements in Securities Class Actions?

After nearly a decade of prominence, disclosure-only settlements may be going extinct. These settlements occur in class action cases arising from the announcement of a merger or acquisition. The plaintiff class alleges that...more

"Two Court of Chancery Deal Litigation Decisions Provide Helpful Guidance"

Chelsea Therapeutics: Post-Closing Bad Faith Claim a ‘Rare Bird’ in Delaware Absent Allegations of Self-Interestedness or Lack of Independence - In In re Chelsea Therapeutics International LTD Stockholders Litigation,...more

Court Relies on Fully Informed Uncoerced Stockholder Vote in 'Revlon' Challenge

Vice Chancellor Joseph R. Slights III's decision In re OM Group Stockholders Litigation, Consol. C.A. No. 11216-VCS (Oct. 12, 2016), represents the latest Delaware Court of Chancery decision to apply Corwin v. KKR Financial...more

Being Prepared To File Business Divorce Litigation May Yield a Negotiated Agreement

Business owners who are having a dispute with their business partners (in New Jersey) should not read this blog and assume their only remedy is shareholder dispute litigation. Because of the cost – both in legal fees, and to...more

Challenge to a Squeeze-Out Merger Dismissed Under MFW Framework

In a stockholder challenge to a going-private merger by a controlling stockholder to buy out minority stockholders, the operative standard of review is ordinarily the most rigorous judicial review, entire fairness. To obtain...more

Blog: Are Stock Options A Counterweight To Whistleblower Bounties?

A new academic study, “Rank and File Employees and the Discovery of Misreporting: The Role of Stock Options,” finds that companies that flout financial reporting rules tend to grant more stock options than their peers that...more

Delaware Court of Chancery Dismisses Litigation Arising from Controller Buyout of Books-A-Million Under "MFW" Framework

On October 10, 2016, the Delaware Court of Chancery issued its decision in In re Books-A-Million, Inc. Stockholders Litigation. The decision, authored by Vice Chancellor J. Travis Laster, is important because it applies the...more

Court Of Chancery Dismisses Post-Closing Claims Under Corwin

Under the recent Corwin decision, a fully-informed vote by uncoerced and disinterested stockholders to approve a merger invokes the business judgment rule and effectively precludes almost any claim the merger was improper. ...more

Court Of Chancery Details Application of M&F Worldwide Criteria

A merger approved in accordance with the criteria set out in the M&F Worldwide decision is subject to the business judgment standard of review, and vulnerable to attack only if its terms are so extreme as to constitute waste....more

Maryland Appellate Courts to Hear Important Maryland Corporate Law Appeals

On Friday, October 7, 2016, the Court of Appeals of Maryland and the Maryland Court of Special Appeals will each hold oral argument in appeals with implications for Maryland corporations and their directors. In Oliveira v....more

New Case Addresses LLC Member Expulsion in New Jersey

The New Jersey Supreme Court has decided a new case addressing what it takes to expel a member from an LLC in New Jersey. The applicable statute in New Jersey (42:2C-46(e)) has three subsections dealing with expelling a...more

Your daily dose of financial news - The Brief – 9.8.16

In a move anticipated over the past year or so, Caliber Home Loans—with PE Lone Star Funds’ backing—is making more loans to “borrowers with spotty credit histories.” A euphemism for subprime, by the way. That targeting has...more

Seventh Circuit Strikes Again – Rejects Settlement In Shareholder Deal Litigation

In yet another strongly-worded opinion, the Seventh Circuit rejected the proposed settlement of a Walgreens’ shareholder strike suit in which the class obtained “worthless” supplemental disclosures but class counsel received...more

Shareholder Derivative Action Or Shareholder Derivative Suit?

A legal proceeding brought in a representative capacity is sometimes referred to as a “shareholder’s derivative action” and sometimes as a “shareholder’s derivative suit”. Which is correct?...more

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