Litigation developments: fundamental shareholder rights.
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On February 23, 2024, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery invalidated a number of significant provisions in a stockholder agreement between a financial institution (the “Company”) and its...more
In a landmark decision, the Delaware Court of Chancery addressed, for the first time, the precise duties that a controlling stockholder owes, and the standard of review that will apply, when a controlling stockholder takes...more
One popular theory of the corporation is that it is a nexus of contracts. As Frank Easterbrook and Daniel Fischel pithily pronounced "Corporations are enduring (relational) contracts." F. Easterbrook and D. Fischel, The...more
In an important decision addressing an issue of first impression, the Delaware Court of Chancery determined that corporate officers owe a fiduciary duty of oversight under Delaware law. The case, In re McDonald’s Corporation...more
David F. Johnson co-presented “Minority Investor Rights in Private Companies: Buy-Sell Agreements, Court-Ordered Buyouts, Breach of Fiduciary Duty” for a nationwide audience for Stafford Webinars on January 20, 2021. David...more
The Background: The Delaware Chancery Court held that a board of directors breached its fiduciary duties in adopting a shareholder rights plan, or "poison pill," with an unprecedented combination of "extreme" features,...more
On Feb. 26, 2021, the Delaware Court of Chancery ruled that the board of directors of The Williams Companies breached its fiduciary duties by adopting a stockholder rights plan, otherwise known as a poison pill, because the...more
In High River Ltd. P’ship v. Occidental Petroleum Corp., No. CV 2019-0403-JRS, 2019 WL 6040285 (Del. Ch. Nov. 14, 2019), the Court of Chancery of the state of Delaware recently refused to hold that Section 220 books and...more
Not for the first time, I find myself intrigued by the federal courts’ resistance to hearing state law claims for judicial dissolution of business entities where subject matter jurisdiction otherwise exists based on diversity...more
Section 220 of the Delaware General Corporation Law affords stockholders a qualified right to inspect a corporation's books and records. A Section 220 inspection is a powerful stockholder right, and indeed, the Delaware...more
Pillsbury secured an important victory for its client, Solera Holdings Inc., when Delaware Superior Court Judge Abigail LeGrow held—in a matter of first impression anywhere in the country—that a shareholder appraisal action...more
The Delaware courts issued a number of significant decisions in 2018 that are likely to have ripple effects throughout 2019. Among them were a series of cases that further developed the parameters of the Corwin and MFW...more
Under Corwin v. KKR Financial Holdings LLC1 and its progeny, “when disinterested, fully informed, uncoerced stockholders approve a transaction absent a looming conflicted controller,” the irrebuttable business judgment rule...more
We’ve put lawyers from our offices in Spain, France, Germany, the Netherlands, and the U.S. on the spot. Having got them thinking about when they’ve been up against shareholders in M&A litigation, we asked for pointers you...more
Since the Delaware Supreme Court decided Corwin v. KKR Financial Holdings LLC more than two years ago, there has been an open question as to whether and to what extent the principles affirmed in that decision apply in the...more
KT4 Partners LLC v. Palantir Technologies Inc., C.A. 2017-0177-JRS (February 22, 2018) - When a demand to inspect corporate records states a purpose other than to value the corporation’s stock, it is often difficult to...more
On January 10, 2018, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery granted a motion for judgment on the pleadings to plaintiffs, the CEO and another director of TradingScreen Inc., invalidating a written...more
On November 13, 2017, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery rejected a stockholder’s demand to inspect books and records of A. Shulman, Inc. (the “Company”) under Delaware General Corporation Law...more
The Chairman of the Financial Services Committee of the U.S. House of Representatives, Jeb Hensarling (R-TX), on April 19, 2017 released an updated discussion draft of the Financial CHOICE1 Act (Bill), and the Committee held...more
Seyfarth Synopsis: On February 2, 2017, the Appellate Division for the First Department in New York entered an order approving a “disclosure-only” settlement. While acknowledging the “increasingly negative view” of...more
Five Business Entity Forms: • Corporation • General Partnership • Limited Partnership • Limited Liability Partnership (“LLP”) • Limited Liability Company (“LLC”) ...more
I’m pleased to present my 9th annual list of this past year’s ten most significant business divorce cases. The list includes important appellate rulings by the First and Second Departments on dissolution of foreign business...more
As previously reported in Insights: The Delaware Edition, the Delaware Supreme Court’s landmark decision in Corwin v. KKR Financial Holdings LLC, 125 A.3d 304 (Del. 2015) articulated a new defendant-friendly rule for...more
Throughout the second half of 2015, the Delaware Court of Chancery began questioning its long-standing practice of approving deal litigation settlements involving broad releases for defendants in exchange for disclosure (or...more
A recent Texas court of appeals decision bucks the prevailing view when it comes to fiduciary duties owed between shareholders in closely held companies. In Ritchie v. Rupe, the court reversed the jury’s determination that...more