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NC Business Court Approves Another Disclosure Only Class Action Settlement

by Brooks Pierce on

Judge Gale's approval last week of a class action settlement, in In re Krispy Kreme Doughnuts, Inc. Shareholder Litigation, 2018 NCBC 1 gives me another opportunity to rail against disclosure only settlements. You know that I...more

Discretionary Director Compensation Subject to Entire Fairness Review

by White & Case LLP on

On December 13, 2017, on appeal from the Chancery Court, the Delaware Supreme Court in In re Investors Bancorp, Inc. Stockholder Litigation, Del. Supr., No. 169, 2017, Strine, C.J. (Dec. 13, 2017) ("Bancorp"), denied a motion...more

Court Of Chancery Explains When A Prediction Is A Misleading Disclosure

by Morris James LLP on

Chatham Asset Management LLC v. Papanier, C.A. No. 2017-0088-AGB (Dec. 22, 2017) - It is often said that a mere prediction of some future event cannot be misleading because such predictions are speculations that cannot be...more

Does Choice Of Law Include The Parol Evidence Rule?

by Allen Matkins on

On the antepenultimate day before Christmas, the California Court of Appeal issued an opinion that should be of interest and concern to lawyers documenting merger and acquisition agreements. Kanno v. Marwit Capital, No....more

Seventh Circuit Finds Five-Year Sale-of-Business Noncompete Agreement Valid

In E.T. Products, LLC v. D.E. Miller Holdings, Inc., the Seventh Circuit Court of Appeals recently held that noncompete agreements signed by sellers of a business were enforceable under Indiana law, but the sellers did not...more

Delaware Supreme Court Reins in Stockholder Ratification of Director Compensation

• Directors were not entitled to stockholder ratification defense where stockholders only approved the general parameters of director and employee bonuses • This marks the first time in nearly 60 years that Delaware’s...more

Nevada Supreme Court Won’t Allow Advisory Mandamus Escape Hatch

by Allen Matkins on

In Archon v. Eight Jud. Dist. Ct., 133 Nev. Adv. Op. 101 (2017), the Nevada Supreme Court provides a concise explanation of the uses of mandamus and administrative mandamus as escape hatches from the final judgment rule. The...more

Boards Beware: Delaware Supreme Court Limits Application of Deferential Standard for Reviewing Director Equity Awards

On December 13, 2017, the Delaware Supreme Court issued an opinion, In re Investors Bancorp, Inc. Stockholder Litigation, Case No. 169, holding that, except under limited circumstances, the court will not apply the...more

Court Of Chancery Explains Caremark Claims

by Morris James LLP on

Oklahoma Firefighters Pension & Retirement System v. Corbett, C.A. 12151-VCG (December 18, 2017) - This decision is an exhaustive review of what constitutes a Caremark claim. It makes it clear that merely because the...more

Delaware Supreme Court Explains When Derivative Case May Be Dismissed

by Morris James LLP on

City of Birmingham Retirement and Relief System v. Good, No. 16, 2017 (December 15, 2017) - This decision explains again that actual or constructive knowledge of persistent corporate wrongdoing is needed before there is a...more

Delaware Supreme Court Clarifies Ratification Defense In Stock Option Cases

by Morris James LLP on

In re Investors Bancorp Inc. Stockholder Litigation, No. 169, 2017 (December 13, 2017) - There has been some uncertainly over the effect of stockholder approval of stock option plans for directors, such as does that...more

Court Of Chancery Expands MFW To Recapitalization

by Morris James LLP on

IRA Trust FBO Bobbie Ahmed v. Crane, C.A.. 12742-CB (December 11, 2017) - This is an important decision because it extends the holding of MFW to a stock reclassification. Under the 6-part test of MFW, the business judgment...more

Superior Court Rules When Fees Recoverable

by Morris James LLP on

Clean Harbors Inc. v. Union Pacific Corporation, No. N15C-07-081 MMJ CCLD (Nov. 15, 2017) - When an obligation to indemnify includes the fees incurred in the underlying litigation is a surprisingly frequent question....more

Operating Agreement Defeats Statutory Buyout Rights Upon LLC Member’s Withdrawal

by Farrell Fritz, P.C. on

When the tsunami of LLC enabling statutes swept the U.S. in the late ’80s and early ’90s, including New York in 1994, many included a default rule authorizing as-of-right member withdrawal and payment for the “fair value” of...more

U.S. Supreme Court Hears Oral Argument In Case That Raises Issue Of Whether State Courts Have Jurisdiction Over Securities Act...

by Shearman & Sterling LLP on

On November 28, 2017, the U.S. Supreme Court heard argument in Cyan, Inc. v. Beaver County Employees Retirement Fund, No. 15-1439, a case addressing whether state courts have jurisdiction over class actions asserting...more

Supreme Court Questions “Obtuse” Statute Addressing Jurisdiction Over Securities Act Claims

by Latham & Watkins LLP on

Justices hear oral arguments on whether Plaintiffs can evade federal jurisdiction over Securities Act claims by exploiting what the Court calls statutory “gibberish” in the Securities Litigation Uniform Standards Act. Please...more

Seventh Circuit, Critical of Purchasing Company’s Due Diligence, Declines To Find Seller Breached Of The Duty Of Good Faith

On November 27, the U.S. Court of Appeals for the Seventh Circuit decided the case of Betco Corporation v. Peacock, et al., which concerns a contractual dispute between the buyer and the seller of companies that produce and...more

NC Business Court Stretches NCRCP 14 to Allow New Third Party Defendants To Be Added Years After The Commencement Of Litigation

by Brooks Pierce on

The North Carolina Rules of Civil Procedure are fairly identical to the Federal Rules of Civil Procedure. In fact, I am hard pressed to think of any substantial differences....more

Court Of Chancery Finds Pre-Merger Suit Unripe

by Morris James LLP on

This is an interesting decision with potential implications for future shareholder litigation. Briefly, the complaint alleged that, in connection with a proposed merger, the controlling shareholder secured a side deal at the...more

Court of Chancery Confirms MFW Applies to Controlled-Company Sale With Disparate Consideration

In 2014, the Delaware Supreme Court affirmed in Kahn v. M&F Worldwide Corp., 88 A.3d 635 (MFW II), that the business judgment rule would apply to controlling stockholder “squeeze-out” mergers if the transaction is conditioned...more

Activists at the Gate: Court of Chancery Weighs In on Claims Involving Activist Stockholders

Several recent decisions applying Delaware law offer helpful insight about the impact that activist investor involvement has on board decision-making leading to a transaction and how those decisions will be reviewed by the...more

Delaware Court Of Chancery Rejects Books-And-Records Demand Driven By Entrepreneurial Counsel

by Shearman & Sterling LLP on

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

Magistrate Recommends Refusing A Request For A Preliminary Injunction Based On A Breach Of Fiduciary Duty Claim Arising From An...

by Winstead PC on

In BCOWW Holdings, LLC v. Collins, plaintiffs sued a former member and his new company asserting breach of fiduciary duty and numerous other claims based in part on the defendants allegedly usurping a corporate opportunity....more

Court Of Chancery Issues A Definitive Opinion on Aronson

by Morris James LLP on

Lenois v. Lawal, C.A. No. 11963-VCMR (Nov. 7, 2017) - This case illustrates the power of well-functioning special committee to diffuse the potentially corruptive influence of a self-interested controller on a transaction....more

The Good, the Bad and the Ugly: Candour in Ex Parte Applications

by Bennett Jones LLP on

A recent decision by the Alberta Court of Appeal (ABCA) reminds us that counsel must take care to provide a balanced view of both sides and not overreach in their asks when seeking an ex parte application, lest the court set...more

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