The Situation: When the Delaware Supreme Court decided Kahn v. M&F Worldwide Corp. (MFW) in 2014 (88 A.3d 635 (Del. 2014)), it provided a pathway for business judgment review for "freeze-out" merger transactions involving...more
The Second Circuit recently revived a securities class action against the crypto exchange Binance Holdings Ltd., holding that plaintiffs plausibly alleged their transactions on the exchange were "domestic," as required by the...more
The SEC has adopted the much-anticipated climate-related disclosure rules, which are more than 900 pages long, two years after they were first proposed. Although the rules will almost certainly face challenges in court that...more
During 2023, securities lawsuit filings rose for the first time in four years. Settlements declined last year; there were nine mega-settlements of more than $100 million, including a $1 billion settlement. Case filings...more
2/28/2024
/ Class Certification ,
Cryptocurrency ,
False Statements ,
Fiduciary Duty ,
Financial Institutions ,
Financial Services Industry ,
Misleading Statements ,
Scienter ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
Securities Litigation ,
Securities Regulation ,
Securities Violations ,
Special Purpose Acquisition Companies (SPACs) ,
Standing ,
Statute of Limitations
In Short -
The Background: Indemnity clauses are often included in contracts and can be extremely valuable, but they also raise many potential challenges to enforcing them, including state statutes, common law...more
A Washington federal judge dismissed challenges to Starbucks's Diversity, Equity, and Inclusion ("DEI") policies in a strongly worded opinion, making clear that politics don't belong in his courtroom....more
In Short -
The Situation: The Delaware Court of Chancery recently held that supplemental disclosures must be "material" to warrant mootness fees in litigation challenging the disclosures for M&A transactions. Anderson v....more
In Short -
SPAC Deals: Special purpose acquisition companies ("SPACs") boomed in 2020 as a means of taking early-stage private companies public. Following enhanced scrutiny from the Securities and Exchange Commission and...more
In Short -
The Background: The recent failure of Silicon Valley Bank, the second-largest bank failure in U.S. history, temporarily paralyzed start-ups, public companies, venture firms, private equity firms, and portfolio...more
According to the Stanford Law School/Cornerstone Research Securities Class Action Clearinghouse, each year since 2001, with just one exception (2006), investors have filed more than 150 securities fraud class actions in the...more
During 2022, securities case filings fell for the fourth consecutive year and were down slightly from 2021. The number of announced settlements rose substantially last year, as did total settlement amounts. The 2022...more
2/8/2023
/ Class Action ,
Class Certification ,
Corporate Counsel ,
Cryptocurrency ,
Cybersecurity ,
Initial Public Offering (IPO) ,
Popular ,
Scienter ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Special Purpose Acquisition Companies (SPACs)
In Short -
The Situation: Until now, Delaware corporations could eliminate or limit monetary liability for breaches of the duty of care only by directors—but not officers. ...more
The U.S. Securities and Exchange Commission's ("SEC") Climate and ESG Task Force has filed one of its most significant enforcement matters to date. On April 28, 2022, the SEC brought an action in the U.S. District Court for...more
On March 9, 2022, the Delaware Court of Chancery issued a post-trial decision in Arwood v. AW Site Services, LLC, subsequently amended on March 24, 2022. The plaintiff, John Arwood, had spent decades building a waste...more
3/30/2022
/ Breach of Contract ,
Buyers ,
Contract Negotiations ,
Contract Terms ,
Corporate Sales Transactions ,
Post-Closing Rights ,
Purchase Agreement ,
Representations and Warranties ,
Sandbagging ,
Sellers ,
Sua Sponte
Before the pandemic, it was generally accepted that establishing an MAE was very difficult—indeed, only one case in Delaware, 2018's Akorn v. Fresenius Kabi, had ever found that an MAE occurred. Following the pandemic, this...more
The Delaware Court of Chancery's application of the "entire fairness" standard in In re MultiPlan Stockholders Litigation is an important development for SPACs incorporated in Delaware, and it could result in more...more
Two circuit courts have now rejected the Second Circuit's "predominantly foreign" exception to Morrison's "domestic transactions" test, which raises the prospect of inconsistent decisions and increases the likelihood of...more
The Situation: Use by outside directors of non-company email accounts or other non-secure platforms to conduct board business risks waiver of the board's privilege. Even if the privilege is maintained, use of such an account...more
The Situation: In response in part to the COVID-19 pandemic, the Delaware legislature amended the Delaware General Corporation Law to address emergency bylaws and related powers exercised by a corporation's board of...more
8/17/2020
/ Board of Directors ,
Bylaws ,
Coronavirus/COVID-19 ,
Corporate Counsel ,
Corporate Governance ,
Delaware General Corporation Law ,
Directors ,
Emergency Management Plans ,
Emergency Powers ,
Indemnification ,
New Amendments ,
Securities and Exchange Commission (SEC) ,
Shareholder Meetings
The Situation: Stockholders sought appraisal—judicial determination of the "fair value" of their stock—in connection with a merger. The Delaware Court of Chancery found that the fair value was equal to the company's...more
While the Securities and Exchange Commission ("SEC") is currently focused on maintaining orderly markets, and extending exemptions from reporting and delivery requirements for entities affected by the coronavirus (COVID-19),...more
On January 27, 2020, OCIE issued a report detailing cybersecurity and resiliency observations the staff made after "thousands of examinations of broker-dealers, investment advisers, clearing agencies, national securities...more
2/10/2020
/ Broker-Dealer ,
Cybersecurity ,
Data Protection ,
Data Security ,
Investment Adviser ,
OCIE ,
Regulation S-ID ,
Regulation S-P ,
Risk Assessment ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC) ,
Vendors
The Situation: Directors of a biopharmaceutical company face potential liability where they knew—or should have known—that the company was not complying with regulations governing a matter of critical importance to the...more
The Situation: Directors of Blue Bell Creameries USA, Inc. ("Blue Bell") were sued for breach of fiduciary duty following a lethal listeria outbreak in its ice cream facilities. Applying the duty of oversight first...more
8/8/2019
/ Blue Bell Creameries ,
Board of Directors ,
Breach of Duty ,
Business Judgment Rule ,
Caremark claim ,
DE Supreme Court ,
Derivative Suit ,
Duty of Loyalty ,
Food Manufacturers ,
Food Safety ,
Listeria ,
Oversight Duties ,
Section 220 Request
The decision makes clear that deal price is an appropriate indicator of fair value even where there is only one bidder.
In Verition Partners Master Fund, Ltd. v. Aruba Networks, Inc., the Delaware Supreme Court reversed a...more
5/10/2019
/ Acquisitions ,
Appraisal ,
Appraisal Rights ,
Arms Length Transactions ,
Corporate Counsel ,
DE Supreme Court ,
Deal Price ,
Fair Market Value ,
Mergers ,
Private Equity ,
Shareholder Rights ,
Stock Prices