News & Analysis as of

Shareholder Litigation Derivative Suit

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

"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

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

Yahoo Data Breach Update: A Third Notification + Shareholders Sue

Last week, Yahoo issued another warning to some of its customers telling them that their personal information may have been compromised in a data breach. This is the third notification to Yahoo users that their information...more

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

by DLA Piper on

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

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

by Snell & Wilmer on

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

Yellow Flags Are Not Red Flags: Delaware Court of Chancery Rejects Caremark Claim in Reiter v. Fairbank

by Carlton Fields on

In October 2016, the Delaware Court of Chancery rejected a shareholder derivative lawsuit premised on an alleged lack of oversight by the directors of Capital One Financial Corp., Reiter v. Fairbank, C.A. No. 11693-CB, 2016...more

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

by Saul Ewing LLP on

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

Delaware Corporate and Commercial Case Law Year In Review – 2016

by Morris James LLP on

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

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

Delaware Supreme Court Provides Guidance on Director Independence

by Seyfarth Shaw LLP on

Seyfarth Synopsis: The Delaware Supreme Court recently reversed the dismissal of a derivative complaint for failure to plead demand excusal because it found that certain directors of Zynga Inc. were not independent due to...more

Shareholders Derivative Suit Filed against Wendy’s for Data Breach

Continuing the trend of filing a shareholders derivative suit following a data breach, a Wendy’s shareholder recently filed a derivative suit against Wendy’s executives and board members alleging they did not adequately...more

Home Depot Evades Shareholder’s Derivative Suit for 2014 Data Breach

by BakerHostetler on

Public companies that are proactively working to mitigate “cyber” risks and prepare to respond to potential incidents frequently ask whether a “breach” will lead to litigation, loss of customers, stock price decline, and...more

"Delaware Supreme Court Rules on Director Independence"

The Delaware Supreme Court recently issued an important decision on the subject of director independence. In Sandys v. Pincus, No. 157, 2016 (Del. Dec. 5, 2016), the Delaware Supreme Court held that certain directors of...more

Shareholders’ Derivative Suit Against Home Depot Dismissed

On November 30, 2016, The Home Depot, Inc. (Home Depot) got a victory in the shareholders’ derivative suit filed against it for its alleged failure to institute necessary controls to secure its data relating to its 2014...more

How Does One Know When A Corporation Is Antagonistic?

by Allen Matkins on

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

by Seyfarth Shaw LLP on

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

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

by Morris James LLP on

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

Delaware Supreme Court Finds Pre-Suit Demand Was Excused

by Morris James LLP on

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

Shareholder Derivative Action Or Shareholder Derivative Suit?

by Allen Matkins on

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

Delaware Law Updates – Court of Chancery Puts Boards of Directors on Notice that Contracting Away Derivative Claims in a Merger...

by McCarter & English, LLP on

Vice Chancellor Glasscock has held that a merger designed to eliminate derivative claims against a majority of directors justified the application of the entire fairness standard of review in a direct challenge to the merger....more

To Hell with Hadden: The Adoption of the Tooley Standard in Tennessee

by Butler Snow LLP on

The Tennessee Supreme Court recently adopted a new standard for determining whether a shareholder claim is direct or derivative. Specifically, in Keller v. Estate of Edward Stephen McRedmond, the Court “set aside the...more

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