News & Analysis as of

Business Judgment Rule

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

Does California Side With Delaware Or New York On Special Litigation Committee Reviews?

by Allen Matkins on

As discussed in the two preceding posts, Nevada’s Supreme Court last week decided to adopt New York’s standard of review of special litigation committee recommendations to dismiss stockholder derivative suits. In re Dish...more

Nevada Favors New York Over Delaware Precedent For SLC Review

by Allen Matkins on

Nevada law endows a board of directors “full control over the affairs of the corporation”. NRS 78.120(1). This control is subject only to such limitations as may be provided by NRS chapter 7, or the articles of...more

Forging ahead with “entire fairness,” or playing it safer (procedurally speaking)

by Ropes & Gray LLP on

Controlling stockholder buyouts of Delaware corporations are generally scrutinized under the lens of “entire fairness” to determine whether the transaction was the product of fair dealing and fair price. Notably, however,...more

In re Martha Stewart Living Omnimedia, Inc. Stockholder Litigation: MFW Provides Recipe for Protecting One-Sided Controller...

by Perkins Coie on

In its opinion in In re Martha Stewart Living Omnimedia, Inc. Stockholder Litigation,[1] issued in August 2017, the Delaware Chancery Court addressed a question left open under Kahn v. M&F Worldwide Corp.[2] (MFW)—namely,...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

Blog: Martha Stewart Decision Draws Roadmap for Controller Sales to Third Parties

by Cooley LLP on

A transaction involving a controlling stockholder on both sides of the deal presents a clear conflict of interest that will result in heightened scrutiny under the “entire fairness” standard of review if later challenged....more

Delaware Court Of Chancery Extends MFW Protections To One-Sided Controller Transactions

by Shearman & Sterling LLP on

On August 18, 2017, Vice Chancellor Joseph R. Slights III of the Delaware Court of Chancery dismissed a putative shareholder suit asserting claims for breach of fiduciary duty against Martha Stewart, the controlling...more

More On Suing The CEO For Social Activism

by Allen Matkins on

The last few days, I’ve been writing about the legal issues raised by Jon L. Pritchett and Ed Tiryakian in a recent opinion piece published by The Wall Street Journal. To sum up the discussion so far, Professor Stephen...more

Suing The CEO For Social Activism Is Likely To Be Challenging Under Nevada Law

by Allen Matkins on

Yesterday’s post concerned asked the question whether shareholders can sue CEOs for social activism. The answer is of course, yes. The more interesting question is whether shareholders will win the suit. To answer that...more

Delaware Court of Chancery Extends Business Judgment Rule Deference to Controller Transactions Involving Third-Parties

On August 18, 2017, the Delaware Court of Chancery granted defendants’ motion to dismiss a class action brought by former minority stockholders of Martha Stewart Living Omnimedia, Inc. (“MSLO”) against Martha Stewart and...more

Can Shareholders Sue CEOs For Corporate Social Activism?

by Allen Matkins on

In an August 17, 2017 opinion piece published in The Wall Street Journal, Jon L. Pritchett and Ed Tiryakian had the following message for shareholders...more

Does Assertion Of Business Judgment Rule Waive Attorney-Client Privilege?

by Allen Matkins on

Nevada, like California, has codified the attorney-client privilege...more

Delaware Chancery Court Declines To Dismiss Challenges To Director Option Grants And Outside Investor Voting Agreement

by Shearman & Sterling LLP on

On June 28, 2017, Vice Chancellor Tamika Montgomery-Reeves of the Delaware Court of Chancery declined to dismiss purported derivative and direct stockholder claims for breaches of fiduciary duty against the directors of...more

Missouri enacts new employment law favoring employers

by Thompson Coburn LLP on

On June 30, Governor Eric Greitens signed into law a new bill making notable changes to rights and remedies for claims under Missouri’s discrimination law (“MHRA”) and claims for whistleblower retaliation. The changes more...more

Missouri Levels The Playing Field For Defending Baseless Discrimination Lawsuits

by Fisher Phillips on

Good news for Missouri employers: the days of our state arguably being considered the most dangerous place in America for baseless discrimination lawsuits are about to end. Governor Eric Greitens late last week signed...more

Missouri Governor Greitens Signs Bill Amending MHRA, Bringing State Law More Into Line With Federal Law

On June 30, 2017, Governor Grietens signed a bill which makes sweeping reforms to the Missouri Human Rights Act (MHRA). The MHRA is the state of Missouri’s primary anti-discrimination statute. ...more

Changes in Georgia’s Law on Director Duties

by Bryan Cave on

On July 1, 2017, significant amendments to the director and officer liability provisions of Georgia’s Financial Institution Code and Business Corporation Code will take effect. These amendments, adopted as House Bill 192...more

Delaware Supreme Court Scolds Special Committee Member that Joins Law Firm

The Delaware Supreme Court upheld the Chancery Court decision in Chester County Retirement Systems v. Collins et al. In so doing, it noted one troubling aspect of the record as follows: The plaintiff’s complaint pointed...more

Blog: Will Dual-Class Structures Torpedo The Business Judgment Rule?

by Cooley LLP on

While there has certainly been a lot of debate about the merits and demerits of dual-class stock, one interesting angle was raised by Charles Elson, director of the University of Delaware’s John L. Weinberg Center for...more

Court Of Chancery Explains Corwin Limits

by Morris James LLP on

This is an important decision if only because it explains a further limitation on the Corwin rule that an informed uncoerced stockholder vote insulates a corporate transaction from attack. First, the decision explains when a...more

Delaware's New Focus on Deal Process and Disclosure: Part I

by Pepper Hamilton LLP on

Four recent developments in Delaware law reduce the liability exposure of corporate boards and controlling stockholders in merger transactions, and also benefit minority stockholders. Together, these developments clarify the...more

Delaware Law Updates – Delaware Court Of Chancery Provides Clarity On The “Quasi-Appraisal” Remedy And Post-Closing Claims

by McCarter & English, LLP on

On May 11, 2017, Chancellor Andre G. Bouchard of the Delaware Court of Chancery dismissed with prejudice a putative class action brought by stockholders of networking solutions in In re Cyan, Inc. Stockholders Litigation.[1]...more

Irredeemable: Delaware Case Will Make Redemption Rights Tougher to Enforce

by Farrell Fritz, P.C. on

Venture capital funds routinely negotiate for a right of redemption – the right to require the company to buy out their shares after a certain period of time if an exit has not occurred – as a key element of their exit...more

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