Litigation developments: core M&A and corporate governance doctrines
Compliance Perspectives: Due Diligence and Ultimate Beneficial Ownership (UBO)
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
On May 6, 2021, Vice Chancellor Zurn of the Delaware Court of Chancery issued a 200-page decision denying a motion to dismiss in In re Pattern Energy Group Inc. Stockholders Litigation, a class action challenging the $6.1...more
The Delaware Court of Chancery (the Court) in In re Homefed Corporation Stockholder Litigation chronicles a controlling stockholder’s failed attempt to use the protections outlined in Kahn v. M & F Worldwide Corp. (MFW) to...more
In a decision of interest to private equity investors, the Delaware Court of Chancery (the “Court”) adopted a new framework for determining whether minority stockholders are part of a control group with a separately...more
In Re Tangoe, Inc. Stockholders Litigation was one of those situations where everything that could go wrong did. ...more
In Flood v. Synutra Int’l Inc., the Delaware Supreme Court clarified its holding in Kahn v. M&F Worldwide Corp. (“MFW”). ...more
Chelsea Therapeutics: Post-Closing Bad Faith Claim a ‘Rare Bird’ in Delaware Absent Allegations of Self-Interestedness or Lack of Independence - In In re Chelsea Therapeutics International LTD Stockholders Litigation,...more
In a stockholder challenge to a going-private merger by a controlling stockholder to buy out minority stockholders, the operative standard of review is ordinarily the most rigorous judicial review, entire fairness. To obtain...more
This update provides a summary of recent Delaware caselaw and statutory developments concerning mergers and acquisitions, including new cases regarding appraisal rights, fraud claims and fiduciary duty and deal process...more
In November 2015, the Delaware Supreme Court bolstered the protection afforded to majority or controlling stockholders seeking to buy out the minority, provided that the transaction is structured in accordance with the...more
New York’s highest court earlier this month adopted a more lenient standard for reviewing certain types of corporate transactions between companies and controlling shareholders, similar to that adopted two years ago by...more
Background of Kenneth Cole Productions Shareholder Litigation - The case involved Kenneth Cole Productions (KCP), a public New York corporation well-known as the designer and marketer of shoes, apparel and accessories....more
Action Item: New York’s High court provides a road map of how corporate attorneys should structure going-private transactions involving controlling shareholders. Utilizing certain protective measures at the outset should...more
In re Kenneth Cole Productions, Inc. Shareholder Litigation - We previously reported on the Delaware Supreme Court’s landmark decision in Kahn v. M&F Worldwide Corp. (MFW) applying the deferential, defendant-friendly...more
On May 5, 2016, the New York Court of Appeals ruled that courts should apply the business judgment rule in shareholder lawsuits challenging going-private mergers, as long as shareholders were adequately protected—a decision...more
In a self-interested transaction between a company and its controlling stockholder, the operative standard of judicial review under Delaware law is the most rigorous: entire fairness standard of review. To obtain the least...more
On August 27, 2015 the Delaware Court of Chancery issued a post-trial decision, In re Dole Food Company, Inc. Stockholder Litigation, that held two of Dole’s directors, David Murdock and Michael Carter, personally liable for...more
In an August 27, 2015 decision, Vice Chancellor Laster of the Delaware Chancery Court found that the chief executive officer (David H. Murdock) and president and general counsel (C. Michael Carter) of Dole Food Co., Inc....more
In one of the largest ever M&A-related recoveries for shareholders, Vice Chancellor J. Travis Laster ordered Dole Food Company, Inc.’s Chairman and CEO, David Murdock, and Dole’s former President, COO and General Counsel, C....more
On Thursday, August 27, 2015, Vice Chancellor J. Travis Laster found Dole Food Co., Inc. (“Dole”) Chief Executive Officer, David Murdock, and General Counsel, C. Michael Carter, liable to investors for $148 million in fraud...more
Aside from the very large damage award, this decision should be noted for its thorough analysis of the duties of a controlling stockholder and his aides in the way they act to carry out a going private transaction....more
The Delaware Supreme Court will address the standard for pleading that an independent director has breached fiduciary duties in connection with a controlling shareholder buyout. The issue was certified for interlocutory...more
The more things change, the more they remain the same. As we enter a new year, New York’s Appellate Division faces the same and greater challenges: increasing caseloads, staff shortages, judicial vacancies, and legal disputes...more
On November 26, 2014, the Delaware Court of Chancery denied a motion to dismiss a complaint challenging a going-private transaction where the company's CEO, Chairman and 17.5% stockholder was leading the buyout group. In his...more
New York companies seeking to go private with a controlling shareholder may now be less vulnerable to shareholder litigation. On November 20, 2014, the New York Appellate Division, First Department, affirmed a New...more