News & Analysis as of

Shareholder Litigation

Corwin Stops Litigation Where Deal Protection Measures are not Preclusive

In Re Paramount Gold And Silver Corp. Stockholders Litigation examines the interaction of Corwin, Unocal and deal protection measures. At issue was a Merger Agreement which provided for Coeur Mining, Inc. to acquire all of...more

M&A Watch: Court Questions Accelerated Vesting of Equity Compensation

by Shearman & Sterling LLP on

As we have previously reported, the Delaware Chancery Court recently dismissed the stockholder class action suit In re Columbia Pipeline Group, Inc. Stockholder Litigation, C.A. No. 12152-VCL (Del. Ch. Mar. 7, 2017),...more

Delaware Chancery Court Applies Corwin To Dismiss Post-Merger Fiduciary Duty Claim After Finding A Royalty Agreement Did Not...

by Shearman & Sterling LLP on

On April 13, 2017, Chancellor Andre G. Bouchard of the Delaware Court of Chancery dismissed a shareholder derivative suit alleging a breach of fiduciary duty against the directors of Paramount Gold and Silver Corp....more

Withdraw a Dissolution Claim? Not So Fast

by Farrell Fritz, P.C. on

Article 11 of the Business Corporation Law governs dissolution of closely held New York business corporations. Article 11 has existed, more or less in its current form, for decades. Some of its provisions have been heavily...more

Stockholder Vote Enjoined Over Banker's Financial Interest in Merger

by Morris James LLP on

Investment bankers play a central role in the exploration, evaluation, selection and implementation of strategic alternatives for Delaware companies. To enable stockholders to carefully assess how much weight to give an...more

Ninth Circuit Holds D&O Policy Bars Coverage of FDIC’s Claims

In a decision, the US Court of Appeals for the Ninth Circuit, in finding for a directors & officers (D&O) insurer, denied coverage of the Federal Deposit Insurance Corporation’s (FDIC) claims against a failed bank’s former...more

Delaware Chancery Court Dismisses Suit Challenging Board Compensation Awards Under A Stockholder-Approved Compensation Plan

by Shearman & Sterling LLP on

On April 5, 2017, Vice Chancellor Joseph R. Slights of the Delaware Court of Chancery granted defendants’ motion to dismiss a stockholder derivative suit against the directors of Investors Bancorp, Inc., which had asserted a...more

Delaware Chancery Court Declines To Dismiss Fiduciary Duty Claims In Shareholder-Approved Merger, Finding That Shareholders...

by Shearman & Sterling LLP on

On March 31, 2017, Vice Chancellor Joseph R. Slights III of the Delaware Court of Chancery declined to dismiss a shareholder claim for breach of fiduciary duty against the board of directors (the “Board”) of Saba Software,...more

Where Is Delaware Corporate Litigation Going?

by Morris James LLP on

Litigation involving Delaware corporate law is undergoing major changes. Some commentators predict that Delaware will cease to be the favored forum for M&A litigation. While we disagree with that forecast, it is important to...more

Court of Chancery Applies Ratification To Equity Grants Under Stockholder Approved Plan

by Morris James LLP on

Stockholder approval of an equity compensation plan may or may not constitute ratification over awards to the directors under the plan. When it does, the Court of Chancery will review challenges under the business judgment...more

Court Of Chancery Denies Corwin Defense

by Morris James LLP on

This is a significant decision because it is the first to find that a stockholder vote did not invoke business judgment review under Corwin because the vote was coerced and not fully informed. Under Corwin, a transaction...more

Equity Grants to Directors Subject to Business Judgment Review as a Result of Specific Plan Limits

The Delaware Court of Chancery examined equity grants to directors in In Re Investors Bancorp, Inc. Stockholder Litigation. The equity incentive plan, or EIP, at issue included the following limitations on grants...more

I Was Doing The Same Thing As The Majority Shareholders – Part II

In my last post, I addressed the fact that, just because a minority shareholder has gone along with certain practices in the past, his acquiescence will not necessarily be fatal to a shareholder oppression claim. However,...more

What If I Was Doing The Same Thing I Now Want to Sue Over?

Many clients ask at the start of a business divorce lawsuit, “Is it fatal to a shareholder oppression claim if I was doing some of the same things that the majority owners are doing that I am now complaining about?” As often...more

Southern District Of Ohio Holds Defendants Cannot Challenge The Manner In Which Shares Were Purchased At The Class Certification...

by Shearman & Sterling LLP on

On March 17, 2017, Judge Michael Watson of the United States District Court for the Southern District of Ohio certified a securities class action brought against Big Lots, Inc. (“Big Lots”) and various current and former...more

Massachusetts Supreme Judicial Court Clarifies the Requirements for Shareholder Inspection Demands

by Goodwin on

In Chitwood v. Vertex Pharm. Inc., SJC-12101 (March 20, 2017), the Massachusetts Supreme Judicial Court (SJC) provided important guidance on the scope of the Massachusetts shareholder inspection statute, Mass. G.L. 156D §...more

Disclosure Only Settlements - the Effect of Choice of Law

by Roetzel & Andress on

The Delaware Courts took a significant step in 2016 to reduce the filing in Delaware of lawsuits aimed at procuring disclosure only settlements (meaning settlements that involve only the provision of additional information...more

"Key Takeaways: Lessons Learned From Tax-Related Whistleblower Litigation and Shareholder Actions"

On March 8, 2017, Skadden hosted a webinar titled “Lessons Learned From Tax-Related Whistleblower Litigation and Shareholder Actions.” The Skadden panelists were tax partners Nathaniel Carden and Armando Gomez, and litigation...more

Delaware District Court Allows Shareholder Class Action Suit To Proceed

by Shearman & Sterling LLP on

On March 13, 2017, the United States District Court for the District of Delaware rejected LRR Energy L.P. (“LRR”) and Vanguard Natural Resources, LLC’s (“Vanguard”) motion to dismiss, allowing the putative shareholder class...more

Wendy’s Executives and Board File Motion to Dismiss

We previously reported that Wendy’s was hit with a putative class action shareholders’ derivative suit in December following its data breach in 2016. Late last week, the executives and Board of Wendy’s filed a Motion to...more

Important Decision by Massachusetts Supreme Court May Significantly Reduce Risk of Merger Litigation

The recent decision by the Massachusetts Supreme Court in Int'l Brotherhood of Electrical Workers Loc. No. 129 Benefit Fund v. Tucci has the potential to significantly reduce merger litigation for publicly traded companies...more

Massachusetts Supreme Court Affirms Dismissal Of Shareholder Class Action And Clarifies That Directors Generally Owe Fiduciary...

by Shearman & Sterling LLP on

On March 6, 2017, in a decision authored by Justice Margot Botsford, the Massachusetts Supreme Judicial Court affirmed the dismissal of an action for breach of fiduciary duty brought by former shareholders of EMC Corporation...more

Death Knell to Merger Litigation for Massachusetts Corporations?

by WilmerHale on

In IBEW Local No. 129 Benefit Fund v. Tucci, the Massachusetts Supreme Judicial Court (SJC) affirmed the dismissal of direct claims for breach of fiduciary duty by EMC shareholders challenging the merger of EMC and Dell, Inc....more

Delaware Court of Chancery Holds that Cancellation of Shares Through Merger Deprives Stockholder of Standing in Section 220 Action

In Weingarten v. Monster Worldwide, Inc., C.A. No. 12931-VCG, 2017 WL 752179 (Del. Ch. Feb. 27, 2017), the Delaware Court of Chancery (Glasscock, V.C.) clarified when a plaintiff has standing to vitiate inspection rights...more

Delaware Chancery Court Holds That Former Stockholder Lacks Standing To Bring Section 220 Action For Inspection Of Books And...

by Shearman & Sterling LLP on

On February 27, 2017, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery dismissed for lack of standing a lawsuit for inspection of corporate books and records brought by a former stockholder squeezed out in...more

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