News & Analysis as of

Board of Directors Fiduciary Duty

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

“Lawyer Driven” Books and Records Demand Rejected by the Delaware Court of Chancery

by Reed Smith on

The Delaware Court of Chancery rejects the ability for stockholders to access a corporation’s books and records based on “lawyer driven” motives. A recent decision of the Delaware Court of Chancery, Wilkinson v. A....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

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

Finding Complaint Did Not Adequately Plead Claims For Breach Of Fiduciary Duty, Delaware Supreme Court Affirms Court Of Chancery...

by Shearman & Sterling LLP on

On October 12, 2017, the Supreme Court of Delaware affirmed a decision by the Delaware Court of Chancery to dismiss breach of fiduciary duty claims against the directors of Clear Channel Outdoor Holdings, Inc. (“CCOH”) in...more

Corporate Communicator - Fall 2017

by Snell & Wilmer on

Recent changes to Nevada corporate law reaffirm Nevada’s commitment to providing directors and officers with maximum deference in the exercise of their fiduciary duties on behalf of Nevada corporations. Specifically, Nevada...more

Q&A with Jake Krattiger

by GableGotwals on

Q: Does joining a corporate board impose any personal liability on board members? A: Joining a board doesn’t impose any personal liability on an individual per se, but improper actions taken while serving on a board can...more

Court Of Chancery Explains Demand Excusal Based On Knowing Violations Of Law

by Morris James LLP on

Kandell v. NIV, C.A. No. 11812-VCG (Sept. 29, 2017) - Derivative plaintiffs alleging that directors allowed the corporation they serve to violate the law typically face dismissal for failure to make pre-suit demand on the...more

Condominiums and Conflicts of Interest: How to interpret the rebuttable presumption

The legislature recently amended Chapter 718 of the Florida Statues, relating to condominiums, to create a rebuttable presumption that a conflict of interest exist in certain situations.[1] A conflict of interest is a real or...more

Public Benefit Corporations Have Arrived in Texas

by Jackson Walker on

Public benefit corporations, which are recognized in over 30 states, have now been adopted in Texas. The Texas public benefit corporation laws became effective on September 1, 2017. Now, businesses can incorporate in the...more

Key Texas M&A Issues (Presentation)

by Jackson Walker on

Agenda - Letters of Intent - Best Efforts - Indemnification - Sandbagging - Non-Reliance - Fiduciary Duties - Letters of Intent: • Buyer may seek letter of intent that is generally not binding on either party...more

Dealing with an Unsolicited Offer - The Bank Account

by Bryan Cave on

On today's episode Jonathan Hightower and Rob Klingler discuss how to handle unsolicited offers for your bank....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

Court Of Chancery Gives Guidance On What Constitutes Bad Faith

by Morris James LLP on

In Re Meadwestvaco Stockholders Litigation, C.A. No. 10617-CB (August 17, 2017) - As this decision explains, to state a claim attacking a merger on the basis that the Board acted in bad faith you need more than ...more

Two Delaware Decisions Make Statutory Appraisal a Less Attractive Remedy

During the past several weeks, the Delaware Supreme Court and the Delaware Court of Chancery have issued two opinions, ACP Master, Ltd. v. Clearwire Corporation and DFC Global Corporation v. Muirfield Value Partners, L.P.,...more

Minnesota Supreme Court Articulates Test for Direct Versus Derivative Claims in In re Medtronic, Inc. Shareholder Litigation

by Faegre Baker Daniels on

On August 16, 2017, the Minnesota Supreme Court decided In re Medtronic, Inc. Shareholder Litigation, holding that a shareholder’s claim is properly characterized as a direct claim, not a derivative claim, if the shareholder...more

Blog: CII Updates Its Best Practices For Proxy Access

by Cooley LLP on

As proxy access bylaws have continued to proliferate—with 60% of the S&P 500 now having adopted some form of proxy access provisions—the Council of Institutional Investors has decided that the time is right to update its 2015...more

Court Of Chancery Upholds Duty Of Care and Loyalty Claims

by Morris James LLP on

H&N Management Group Inc. v Couch, C.A. No. 12847-VCMR (Del. Ch. Aug. 1, 2017) - This is a rare case involving apparent lack of care in approving a conflicted transaction and a failure to employ almost any safeguards to...more

Dechert's Global Private Equity Newsletter - Summer 2017 Edition: D&O Insurance Coverage - How Careful Should the Drafting Be?...

by Dechert LLP on

Directors are required to review and approve transformative M&A transactions. The power to approve, however, comes with the potential liability that could be asserted if the transactions do not turn out as projected....more

Delaware Chancery Court Dismisses Post-Closing Challenge To Two-Step Merger Under Corwin Finding Tendering Stockholders Were Fully...

by Shearman & Sterling LLP on

On July 13, 2017, Vice Chancellor Tamika Montgomery-Reeves of the Delaware Court of Chancery dismissed a former stockholder’s breach of fiduciary duty claims against the former directors of Diamond Resorts International...more

Under Delaware Law, the Occurrence of Alleged Illegal Conduct at a Company Is Not Enough to Plead Demand Futility Sufficient to...

In a shareholder derivative action, to survive a motion to dismiss for failure to plead facts showing demand futility, a derivative plaintiff must plead particularized facts showing either actual involvement by a majority of...more

Court Reverses Summary Judgment For Directors Because They Could Not Consent To Their Own Breaches of Fiduciary Duty

by Winstead PC on

In Corley v. Hendricks, three individuals (Gaylen, Dan, and Corley) operated a business as shareholders, officers, and directors. No. 02-16-00293-CV, 2017 Tex. App. LEXIS 3846 (Tex. App.—Fort Worth April 27, 2017, no pet....more

Court Of Chancery Explains When Entire Fairness Applies To Option Grants And Voting Agreements

by Morris James LLP on

While directors have the right to issue options, when the grant is to themselves and there are specific facts suggesting unfairness, those directors will have the burden of proving the grants were entirely fair in a...more

Delaware Court Of Chancery Identifies Fiduciary Duty Constraints On Preferred Equity

by Cole Schotz on

A recent decision of the Delaware Court of Chancery (the “Court”) places certain fiduciary constraints on a company’s ability to satisfy its obligations to its preferred equity holders. While investors often seek to acquire...more

Is It A Breach Of Fiduciary Duty To Fail Or Refuse To Conform To Delaware’s Judicial Decisions Or Practices?

by Allen Matkins on

The answer to this question in Nevada may soon be an unequivocal “no”. Last week, the Nevada Legislature unanimously passed SB 203 and sent it to Governor Brian Sandoval for signature. Among other things, Section 2 of SB...more

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