News & Analysis as of

Breach of Duty

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

Delaware Court Of Chancery Dismisses Breach Of Fiduciary Duty Claims In Connection With Two-Step Merger, Despite Finding Corwin...

by Shearman & Sterling LLP on

On November 30, 2017, Vice Chancellor Tamika Montgomery-Reeves of the Delaware Court of Chancery dismissed breach of fiduciary duty claims against the board of Opower, Inc. (“Opower”) in connection with Opower’s acquisition...more

When Does A Business Dispute That Involves A Third Party Remain “Internal” For Purposes Of An Unfair And Deceptive Trade Practice...

by Ellis & Winters LLP on

The North Carolina Business Court has issued several opinions this year that examine the contours of the “internal business affairs” doctrine. As we have explained in prior posts, North Carolina courts have recognized that...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

Accountancy Forum Newsletter - December 2017

by Reed Smith on

In this edition, we have drafted an article on the recent FRC sanctions and we have also included short summaries of recent cases and items of interest to our target audience. At the end of the newsletter, you will also find...more

Charges By Law Firm-Owned Vendors Challenged In Putative Client Class

by Carlton Fields on

Plaintiffs signed engagement letters with the law firm Finkelstein & Partners (the “law firm”) to represent them in two separate personal injury lawsuits on a contingency basis. ...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

Inside the Courts – An Update From Skadden Securities Litigators - November 2017/ Volume 9 / Issue 4

This quarter’s issue includes summaries and associated court opinions of selected cases principally decided between August 2017 and October 2017....more

Delaware Court Of Chancery Ruling Provides Guidance On Attorney-Client Privilege Protection For Draft Stockholder Communications

by Shearman & Sterling LLP on

At a recent hearing, Vice Chancellor Joseph R. Slights III of the Delaware Court of Chancery provided guidance on the application of the attorney-client privilege to draft stockholder communications in the context of a...more

New York Court Of Appeals Reverses Dismissal Of Derivative Claims Involving Cayman Islands Company, Finding Cayman Islands...

by Shearman & Sterling LLP on

On November 20, 2017, the New York State Court of Appeals reversed the dismissal of derivative claims brought by a shareholder of Scottish Re Group, Limited (“Scottish Re”)—a Cayman Islands company—against the company, its...more

Commercial Division Dismisses Derivative Lawsuit After Board Rejects Shareholder Demand

The decision to bring a lawsuit on behalf of a corporation is entrusted to the corporation’s board of directors. A shareholder may not maintain a derivative lawsuit on behalf of a corporation without first making a demand on...more

Recent Cases of Interest to Fiduciaries

by McGuireWoods LLP on

In the most recent installment of the McGuireWoods Fiduciary Advisory Services annual multipart series on recent fiduciary cases, developments in the law concerning various topics are examined through the following: ...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 Dismisses Derivative Action for Failure to Plead Demand Futility

by Morris James LLP on

A cardinal principle of Delaware law is that directors manage the business and affairs of a Delaware corporation. This includes decisions regarding whether to pursue claims against officers and directors whose breach of duty...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

“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

Defence & Indemnity - October 2017: II. LIABILITY ISSUES A.

by Field Law on

II. LIABILITY ISSUES - A. The Master allowed a claim for a sports injury to be amended to add breach of fiduciary duty as a cause of action in the teacher-student situation, and held that while sports participants are...more

Shareholders Sues Officer Of Delaware Corporation In California State Court, Should Texas Law Apply?

by Allen Matkins on

Our November 16, 2017 post discussed one aspect of the California Court of Appeal’s opinion in Central Laborers’ Pension Fund v. McAfee, Inc., 2017 Cal. App. LEXIS 1008. The case arose from Intel Corporation’s acquisition of...more

Court Of Appeal Finds No Right To Jury In Shareholder Class Action

by Allen Matkins on

In several blog posts, I have commented on the right to a jury trial under California law. This may seem like an inapposite subject for a blog devoted to corporate and securities law issues. Nonetheless, I have...more

Delaware Court of Chancery Rejects "Lawyer-Driven" Section 220 Demand

On November 13, 2017, the Delaware Court of Chancery issued a short but potentially important opinion in Jack Wilkinson v. A. Schulman, Inc., an action to inspect books and records brought under Section 220 of the Delaware...more

Bad Blood Among Late Developer’s Heirs Jeopardizes Real Estate Mega-Deal

A New York real estate deal valued at close to $1 billion came to a grinding halt when the underlying animosities between a late developer’s widow and his children from previous marriages came to a head in court. Although the...more

Delaware Court Of Chancery Dismisses Derivative Action, Finding Demand Unexcused Because Plaintiff Did Not Plead Non-Exculpated...

by Shearman & Sterling LLP on

On November 7, 2017, Vice Chancellor Tamika Montgomery-Reeves of the Delaware Court of Chancery granted a motion to dismiss a derivative and putative class action brought by a minority stockholder of Erin Energy Corporation...more

Aiding & Abetting Fiduciary Breach - What is “Knowing Participation” by South Carolina Professionals?

by Nexsen Pruet, PLLC on

The South Carolina Supreme Court recently clarified liability for aiding and abetting a breach of fiduciary duty. In Bennett v. Carter, 2017 WL 5163467, the Supreme Court reversed summary judgment on a claim against lawyers...more

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