In New Enterprise Associates 14, L.P. v. Rich, the Delaware Court of Chancery held that a covenant not to sue for breach of fiduciary duty, which was contained in a stockholder's agreement and modeled after the NVCA model...more
MFW protects controlling-stockholder transactions even when a third-party bidder makes a competing bid that is superior to a negotiated merger with the controller. A special committee will likely satisfy the duty of care...more
In Brown v. Matterport, Inc., et al., C.A. No. 2021-0595-LWW (Del. Ch. Jan. 10, 2022), the Delaware Court of Chancery held that transfer restrictions restricting trade of stock “outstanding immediately” after a de-SPAC merger...more
When someone releases another from claims, he is relinquishing his right to sue in connection with the subject of the release. So long as it is not procured by fraud, New York courts will generally enforce broad general...more
Courts sometimes disagree over whether provisions in a borrower's organizational documents designed to prevent the borrower from filing for bankruptcy are enforceable as a matter of federal public policy or applicable state...more
WHAT’S THE EXPOSURE? • Settlements up to $140 million • Last year alone, settlements of $17 million, $22 million, $24 million, and among others • Plaintiffs’ lawyers generally get 1/3 of the settlement amounts • Plaintiffs’...more
In Drulias v. 1st Century Bancshares, Inc., No. H045049, 2018 WL 6735137 (Cal. App. Dec. 21, 2018), the California Court of Appeal, Sixth Appellate District, affirmed an order staying a stockholder lawsuit brought in the...more
Seyfarth synopsis: The Second Circuit reversed dismissal of an ERISA stock drop class action finding plaintiff alleged enough to plausibly show that disclosure of alleged corporate problems would not have done more harm than...more
In re CBS Corporation, C.A. No. 2018-0342-AGB (Del. Ch. July 13, 2018) - It is well settled that members of the board of directors are entitled to essentially unfettered access to the corporation’s records to carry out...more
Venture capital firms and their director designees on portfolio company boards can find themselves stuck between their fiduciary duty to common shareholders and the terms of preferred investment documents. Before any other...more
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
It has become a common phenomenon for the announcement of a significant merger transaction to be quickly followed by shareholder class action or derivative litigation challenging the terms of the transaction and the accuracy...more
In In re Appraisal of Dell Inc., No. 9322 VCL, 2016 Del. Ch. LEXIS 81 (Del. Ch. May 31, 2016) (Laster, V.C.), the Delaware Court of Chancery determined that the fair value of the common stock of Dell Inc. (“Dell” or the...more
A recent post-trial decision by Vice Chancellor J. Travis Laster of the Delaware Court of Chancery puts directors serving as designees of preferred investors on notice that they must attempt to maximize value for common...more