News & Analysis as of

Bad Faith Board of Directors

Am I My Director’s Keeper?

by Gray Reed & McGraw on

Board of directors member Y.I. Gnough, who is also president of Algae Company, is in a pickle. Although denying any knowledge of sexual harassment and misconduct by the company founder and deal-maker Iam Algae, three co-board...more

Chancery Dismisses Claim Seeking Damages Post-Closing for Unfair Merger Transaction

by Morris James LLP on

Delaware jurisprudence encourages decision-making by boards of independent and disinterested directors. If a transaction does not involve a controlling stockholder and is approved by a majority of disinterested and...more

Court Of Chancery Explains When Side Deals Are Actionable Under A Bad Faith Theory

by Morris James LLP on

Kahn v. Stern, C.A. No. 12498-VCG (Aug. 28, 2017) - It is not easy to sufficiently plead a bad faith breach of fiduciary duty by a board in approving a merger when a majority of the directors were disinterested and...more

The Supreme Court of Canada Clarifies the Personal Liability of Directors in Oppression Cases

by Bennett Jones LLP on

In Wilson v. Alharayeri, 2017 SCC 39 [Alharayeri], the Supreme Court of Canada in a unanimous decision provides significant guidance as to when directors ought to be held personally liable for oppressive conduct under the...more

Supreme Court of Canada reaffirms personal liability for directors in oppression actions

by Dentons on

On July 13, 2017, the Supreme Court of Canada (SCC) unanimously reaffirmed that a corporation’s directors may be personally liable in an oppression action, and set out the criteria for imposing personal liability. In Wilson...more

Inside the Courts – An Update From Skadden Securities - June 2017

This quarter’s issue includes summaries and associated court opinions of selected cases principally decided between February 2017 and April 2017. The cases address developing trends in class actions, ERISA, fiduciary duties,...more

Second Circuit Affirms Dismissal Of Shareholder Suit, Finding Subject Matter Jurisdiction Was Properly Exercised, Equity Dilution...

by Shearman & Sterling LLP on

On April 26, 2017, the United States Court of Appeals for the Second Circuit affirmed the dismissal of a lawsuit brought by a shareholder of Star Bulk Carriers Corp. (“Star Bulk”) against its directors and entities affiliated...more

Delaware Chancery Court Throws Out Claims Over $10 Million Severance Payment to CEO

by Seyfarth Shaw LLP on

Seyfarth Synopsis: A Delaware Chancery Court judge last week dismissed a derivative complaint seeking to recover a $10 million severance payment made to a corporation’s former CEO because he found that plaintiff shareholder...more

Delaware Law Updates - 2016 Year in Review

by McCarter & English, LLP on

Our Delaware Corporate and Alternative Entity Law attorneys closely followed the opinions coming from Delaware’s Supreme Court and Court of Chancery. Our 2016 Year in Review is a collection of brief summaries of selected...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

"Two Court of Chancery Deal Litigation Decisions Provide Helpful Guidance"

Chelsea Therapeutics: Post-Closing Bad Faith Claim a ‘Rare Bird’ in Delaware Absent Allegations of Self-Interestedness or Lack of Independence - In In re Chelsea Therapeutics International LTD Stockholders Litigation,...more

Delaware Court of Chancery Dismisses Litigation Arising from Controller Buyout of Books-A-Million Under "MFW" Framework

by King & Spalding on

On October 10, 2016, the Delaware Court of Chancery issued its decision in In re Books-A-Million, Inc. Stockholders Litigation. The decision, authored by Vice Chancellor J. Travis Laster, is important because it applies the...more

Delaware Law Updates – The Duty of Loyalty: Anything But ‘Hazy Jurisprudence’ on an Exacting, But Narrow, Standard

by McCarter & English, LLP on

In a recent decision out of the Delaware Court of Chancery—In re Chelsea Therapeutics International Ltd. Stockholders Litigation., Consol. C.A. No. 9640-VCG—Vice Chancellor Glasscock was faced with a claim that the board of...more

Court of Chancery Explains Bad Faith Test

by Morris James LLP on

This decision deals with when the actions of directors may be considered to be in bad faith, at least when there is no self-interest involved and the directors are properly informed before taking the time to decide what to...more

Court Of Chancery Reverses Director Resignation

by Morris James LLP on

In this unusual case, the Court of Chancery has reinstated a director who was tricked into resigning. The opinion has a good discussion of how directors may resign and when their resignation is not effective....more

"Dole Ruling Serves as Cautionary Tale for Take-Private Deals"

Earlier this year, in a consolidated breach of fiduciary duty and appraisal action, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery issued a post-trial opinion that includes many important takeaways for...more

Update from Wilson Elser’s D&O Insurance Digest

by Wilson Elser on

Litigation Developments and Mega Settlements - Dole Food, Inc. Derivative Action – Delaware Chancery Court Finds D&Os Engaged in Fraud - Dole Food, Inc. shareholders sued Dole Chairman and CEO David Murdock and Dole...more

Chancery Court Provides Lessons on Conflicts of Interest in a Sales Process – Holds Only Financial Advisor Open to Liability

In an October 1st decision (In re Zale Corporation), the Delaware Chancery Court dismissed claims that Zale Corporation’s directors breached their fiduciary duties in connection with Zale’s agreement to merge with Signet. ...more

Court of Chancery Dismisses Derivative Claims Even Though Entire Fairness Arguably Applied

by Morris James LLP on

Delaware’s requirements for stockholders to maintain derivative actions reflect the twin principles of director management and control and accountability. Because directors manage the business and affairs of Delaware...more

Expanded Liability of Officers in Russian Companies

In Resolution No. 62 “on Liability of Members of a Company’s Governing Bodies” dated July 30, 2013 (the “Resolution”) the Russian Supreme Arbitrazh Court provided new interpretations of the Russian statutory rule that the...more

Delaware Court Permits Shareholder Damages Suit Against Novell Inc. Board To Continue - Alleged Lack of Board Impartiality in...

by Reed Smith on

In a January 3, 2013 decision, the Delaware Court of Chancery declined to dismiss a shareholder class action lawsuit that claimed the Board of Novell Inc. breached its fiduciary duty in allowing a $2.2 billion sale of Novell...more

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