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Buyouts Fiduciary Duty

A&O Shearman

Delaware Court Of Chancery Holds That Controlling Stockholder Conduct Did Not Breach Fiduciary Duties But Rendered Buyout...

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On January 24, 2024, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery awarded a stockholder plaintiff class more than $18 million, finding that the acquisition of the “Hometown” division of Sears Hometown...more

Dechert LLP

Delaware Court of Chancery Identifies Fiduciary Duties and Standard of Review for Controlling Stockholder

Dechert LLP on

In a landmark decision, In re Sears Hometown & Outlet Stores, Inc. Stockholder Litigation,1 the Delaware Court of Chancery held that a controlling stockholder did not breach his fiduciary duties when he amended company bylaws...more

Robins Kaplan LLP

Evenstad Family Trial Aftermath: Rule 408 May Not Be Used as a Sword and Shield

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It’s unlikely the extended Evenstad family, former owners and heirs of the Upsher-Smith company, will be celebrating Thanksgiving together this year. After all, the last time the family got together was likely for the 16-day...more

Patton Sullivan Brodehl LLP

“Equitable Buyout” as a Remedy for LLC Wrongdoing?

In the world of LLCs, buyouts — where one member sells his/her membership interest to another member or the LLC itself — are commonplace. Buyouts generally fall into one of two categories: contractual — where the...more

Patton Sullivan Brodehl LLP

Can a Statutory Buyout be Dodged by Dismissal?

The statutory right to judicial dissolution in California comes with a hook — the defendants can avoid dissolution by exercising a “buyout” procedure.  This is true in both LLCs (Corporations Code section 17703.03) and...more

Winstead PC

Presentation: Minority Investor Rights in Private Companies: Buy-Sell Agreements, Court-Ordered Buyouts, Breach of Fiduciary Duty

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David F. Johnson co-presented “Minority Investor Rights in Private Companies: Buy-Sell Agreements, Court-Ordered Buyouts, Breach of Fiduciary Duty” for a nationwide audience for Stafford Webinars on January 20, 2021. David...more

Patton Sullivan Brodehl LLP

Portrait of a Mangled Business Divorce

Business divorce can be messy, as reflected by many of the cases covered here at The LLC Jungle. Two issues that frequently arise during the dissolution of an LLC are: 1. the statutory buyout procedure, and 2. claims for...more

Farrell Fritz, P.C.

Appellate Ruling Puts Pappas v. Tzolis to the Test

Farrell Fritz, P.C. on

The New York Court of Appeals’ 2012 opinion in Pappas v Tzolis, decided in the wake and spirit of that court’s rulings the year before in the Centro Empresarial v America Movil and Arfa v Zamir cases, raised the bar for...more

Goodwin

A Win for Deal Certainty, Delaware Court of Chancery Orders Closing of Cake Supplier Acquisition

Goodwin on

A Win for Deal Certainty, Delaware Court of Chancery Orders Closing of Cake Supplier Acquisition; Under Armour to Pay $9M to Settle SEC Charges Involving Disclosure Failures; First Circuit Upholds Decision Applying Federal...more

K&L Gates LLP

Chancery Court Dismisses Former LLC Member’s Claims for Alleged Amounts Owed and Breach by Former Co-Members

K&L Gates LLP on

In Terry L. Menacker v. Overture, L.L.C., et al., C.A. No. 2019-0762-JTL (Del. Ch. Aug. 4, 2020), the Delaware Court of Chancery (the “Court”) considered a motion to dismiss claims by a former member of Overture L.L.C. (the...more

Farrell Fritz, P.C.

Business Divorce Nation: A Cross-Country Tour of Recent Decisions of Interest

Farrell Fritz, P.C. on

There’s tremendous diversity from state-to-state when it comes to statutory and judge-made law in business divorce cases. The basic fact patterns one sees in cases from across the country, however, don’t vary nearly as much....more

Winstead PC

The Plight of Oppressed Private Company Minority Investors:  No Legal Escape Available Without a Buy-Sell Agreement in Place

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The legal front remains forbidding for private company minority investors who seek to secure a buyout of their ownership stake based on claims for oppression against the company’s majority owners. It has been six years since...more

Holland & Knight LLP

Further Observations on Fair Value: FAED, the Fair and Equitable Discount - Current Issues in Closely Held Businesses Series: Part...

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Once it is understood that "fair value" is not the same as "fair market value," there appears to be two general views of what is "fair value" in the context of breach of fiduciary duty or shareholder oppression cases. For...more

Holland & Knight LLP

Buy Out at Fair Value - Current Issues in Closely Held Businesses Series: Part 5

Holland & Knight LLP on

The prior discussion, Determining a Remedy After Oppression or Breach of Fiduciary Duty (Part 4), presented a listing of the potential remedies on a finding of a breach of duty and oppression. Frequently, the animosity among...more

Holland & Knight LLP

Determining a Remedy After Oppression or Breach of Fiduciary Duty - Current Issues in Closely Held Businesses Series: Part 4

Holland & Knight LLP on

Once the court finds that oppression and/or a breach of fiduciary duty has occurred, it has to determine a remedy. Either by statute or within its equitable authority, the court may offer many alternative remedies...more

Farrell Fritz, P.C.

Post-Quarantine Buyout Of A Partner

Farrell Fritz, P.C. on

Uptick in Business Divorces? I’ve read a number of articles over the last few weeks in which marriage counselors have been predicting a wave of divorce filings once the COVID-19 quarantine has been lifted...more

White & Case LLP

2019 Half-year in review: M&A legal and market developments

White & Case LLP on

We set out in the attached Newsletter a number of interesting English court decisions and market developments which have taken place in the second half of 2019 and their impact on M&A transactions. This review looks at these...more

Winstead PC

Shareholder Oppression Claims: Looking Past the Urban Myth to Remedies that Continue to Survive in The Real World of Texas Law

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Many Texas lawyers and their private company clients continue to refer to the claim for shareholder oppression as if it remains a viable cause of action under Texas law. And yet, for all practical purposes, the claim for...more

Farrell Fritz, P.C.

Summer Shorts: LLC Minority Member Oppression and Other Decisions of Interest

Farrell Fritz, P.C. on

It’s that time of year again, when I offer some lighter fare for poolside consumption consisting of summaries of a few recent decisions of interest involving disputes between business co-owners....more

Winstead PC

New Year’s Resolutions for Majority Owners: Promoting Peace With Partners in 2019

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Conflicts with business partners are not just a serious distraction for majority owners of private companies, these ownership disputes can be expensive, time-consuming and harmful to the long-term prospects of the business....more

Sheppard Mullin Richter & Hampton LLP

Getting to Business Judgment in an Interested Transaction: Controlling Stockholder Must Put Procedural Protections in Place Prior...

In Flood v. Synutra Int’l, Inc., No. 101, 2018, 2018 Del. LEXIS 460 (Del. Oct. 9, 2018), the Delaware Supreme Court (Strine, C.J.) held that a controlling stockholder who pursues a merger with the controlled company will have...more

Skadden, Arps, Slate, Meagher & Flom LLP

Inside the Courts – An Update From Skadden Securities Litigators - March 2018/ Volume 10 / Issue 1

This quarter's issue includes summaries and associated court opinions of selected cases principally decided between November 2017 and January 2018. The cases address developing trends in appraisal, class certification, core...more

Farrell Fritz, P.C.

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

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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

Skadden, Arps, Slate, Meagher & Flom LLP

Insights: The Delaware Edition - May 2016

This issue focuses on important, developing areas of Delaware corporation law and deal litigation, including the Court of Chancery’s clarification of its evolving views about disclosure-based deal litigation settlements;...more

Winstead PC

Court Holds that Disgorgement Award for Breach of Fiduciary Duty Was Neither Punitive Nor Excessive and that Exemplary Damages...

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A court of appeals recently issued an opinion rejecting a fiduciary’s claims regarding the excessiveness of the trial court’s judgment that awarded disgorgement and exemplary damages. In Swinnea v. ERI Consulting Engineers,...more

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