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Shareholders have accused Under Armour of “concealing the impact” of Sports Authority’s bankruptcy from investors in order to artificially inflate its stock price. The suit comes on the heels of a disastrous Q4 for UA, in...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

Cybersecurity Obligations of Directors - Guidance from the United States Decisions

Your organization will in all likelihood suffer a cyberattack. According to a recent study by Accenture, the average Canadian organization faces about 96 cyberattacks per year, nearly one third of which result in a security...more

Important Reminders for the 2017 Proxy Season

The following are some important reminders and updates for the 2017 proxy season. Say-When-on-Pay - Required Vote in 2017 - The Securities and Exchange Commission (SEC) requires companies to conduct a...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

Blog: Shareholder Proposals Regarding Lead Director Tenure: A Harbinger Of Things To Come?

The topic of director tenure has increasingly become the focus of both academics and investors. Some argue that long-term directors contribute deep knowledge of the company and provide experience, historical memory and...more

SEC Targets Lapses in Ownership Reporting in Battles for Corporate Control

The SEC has recently announced settlement of enforcement actions targeting violations of beneficial reporting requirements under Section 13(d) of the Act. In one of the most recent actions (available here), the SEC’s...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

Shareholders Seeking Books and Records Must Demonstrate Credible Basis to Infer Wrongdoing

On February 2, 2017, the Delaware Court of Chancery reaffirmed that shareholders seeking to inspect the books and records of Delaware corporations must demonstrate a credible basis to infer corporate wrongdoing. Accusations...more

Race to the Exit as Professional Practice Falters

Does a shareholder have a fiduciary duty not to exercise a contractual right under the shareholders’ agreement to resign and demand a buy-out of his shares by the financially distressed corporation, particularly when the...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

The Different Roles of Shareholders, Directors and Officers in Family-Owned Businesses

Many family-owned businesses are organized as corporations to protect the owners from personal liability for business obligations. One consequence of organizing as a corporation is the legal separation of ownership and...more

Chancery Court Decision, Invalidating Supermajority Director Removal Bylaw, Has Broad Implications for Supermajority Bylaw...

In Frechter v. Zier, C.A. No. 12038-VCG (Del. Ch. Jan. 24, 2017), the Delaware Court of Chancery held that a corporation’s bylaw, requiring a supermajority stockholder vote for the removal of directors, was invalid. ...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

Shareholder Liability For Corporate Income Tax?

Limited Liability - In general, the creditors of a corporation cannot recover the corporation’s debts from its shareholders—the shareholders enjoy the benefit of limited liability protection as a matter of state law....more

"US Corporate Governance: Will Private Ordering Trump Political Change?"

In the weeks following the U.S. presidential election, companies and investors enjoyed a stock market rally fueled by expectations concerning tax cuts, increased government spending and significant deregulation. While the...more

NYSE Issues Its 2017 Listed Company Compliance Guide Memoranda for Both Domestic Issuers and FPIs

On February 1, 2017, the NYSE issued separate Listed Company Compliance Guidance memoranda for both U.S. companies (“Domestic Companies”) and foreign private issuers (“FPIs”) listed on the NYSE. Below is a brief overview of...more

Federal Court of Australia Approves a Common Fund Class Action Model for the First Time – No Opt-In Required

As discussed in this space before, Australia is quickly becoming a key venue for securities class action litigation. With the release of its decision in Money Max Int. Pty. Ltd. (Trustee) v. QBE Insurance Group Limited, the...more

Blog: BlackRock CEO’s annual letter asks companies to address impact of changes in global environment

This year, in his annual letter to corporate CEOs, Laurence D. Fink, CEO of asset manager BlackRock, challenges companies to address the impact of significant political, economic, societal and technological changes on their...more

Capital Markets & Public Companies Quarterly: 2016 Goes Out with a Bang

As 2016 drew to an end, the US Securities and Exchange Commission (SEC) kept up its pace to close out a busy year. In addition to issuing proposed rules for universal proxies, the SEC released several new Compliance &...more

Securities and Governance Updates – January 2017

As part of BakerHostetler’s commitment to serve as a strategic business partner, we are pleased to publish this first edition of our Securities & Governance Bulletin. This resource is designed to keep executives, corporate...more

Judged by the Company You Keep

Earlier this month news broke that the venerable British automaker Rolls-Royce had settled an international prosecution alleging that the company’s third-party intermediaries bribed local officials in Asia. The company agreed...more

Blog: Selling Your Company: Merger vs. Stock Sale vs. Asset Sale

When deciding to sell your company, and taking some of the initial steps towards that goal (including Getting Ready for an M&A exit and Negotiating a Term Sheet), an important step will be determining the structure of the...more

Three Big Reasons to Incorporate in America’s Second Smallest State: Delaware

When our clients decide to launch a business, they often ask us about the incorporation process. Business owners incorporate their business primarily to limit their personal liability for business debts and obligations....more

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