News & Analysis as of

Derivative Suit

Update on BofI Whistleblower Litigation

We previously reported in March and last October on a whistleblower litigation brought by Charles Erhart, a former Bank of Internet Holding, Inc. (BofI) internal auditor. On December 3, 2015, in a separate action, the...more

Caremark Claims And California

by Allen Matkins on

A popular claim for plaintiffs in derivative litigation against directors of Delaware corporations has been that the directors breached their duty of oversight. This theory has its genesis in Chancellor William T. Allen's...more

Do Shareholders Need to Make a Demand Upon the Board of Directors Before Filing Suit on a Family-Owned Corporation’s Behalf?

by Murtha Cullina on

When a shareholder claims that a director or officer has harmed a corporation through his or her improper conduct, these claims typically must be brought through a derivative action, in which the shareholder sues on behalf of...more

Personal Jurisdiction/Forum Non Conveniens - The World in US Courts: Spring 2018

Forum Non Conveniens Not Available Where Moving Defendant Failed to Establish It Was Amenable to Process in an Alternative Forum - Arcelik A.S. v. E.I. Du Pont De Nemours and Company, United States District Court for the...more

Commercial Division Enjoins Xerox-Fujifilm Deal Resulting In Resignation of Xerox’s CEO

On April 27, 2018, Justice Barry Ostrager of the Commercial Division enjoined a no-cash transaction that would have granted Fujifilm (“Fuji”) a 50.1% controlling interest in Xerox. ...more

When Demanding Inspection, Don't Overlook The Demand

by Allen Matkins on

The wheels of justice turn slowly. Two years ago, I wrote about Judge Robert C. Jones's ruling in Weinfeld v. Minor, 2016 U.S. Dist. LEXIS 30117 (D. Nev. Mar. 8, 2016). In that ruling, Judge Jones tackled tackled the...more

Corporate Waste Claim Survives Motion To Dismiss

by Fox Rothschild LLP on

Recently, in the decision of Feuer v. Redstone, (Del. Ch. Apr. 19, 2018), the Delaware Court of Chancery considered a motion to dismiss brought in response to a derivative complaint against certain directors of CBS...more

Court Grants 50% LLC Member Derivative Right to Defend Action Brought by Other 50% Member’s Solely Owned Company

by Farrell Fritz, P.C. on

You know there’s something unusual going on in a case involving a dispute between co-members of an LLC — a form of business entity that didn’t exist in New York until 1994 — when the key legal precedents cited in the parties’...more

Court Of Chancery Upholds Waste Claims

by Morris James LLP on

R.A. Feuer v. Redstone, C.A. 12575-CB (April 19, 2018) - This decision involves the rare case where a waste claim is well plead. ...more

Your Daily Dose of Financial News

by Robins Kaplan LLP on

It was a busy Thursday in the big pharma world, with drugmaker Shire rejecting a $60 billion takeover offer from Japan’s Takeda, while US rival Allergan disclosed that it was considering a bid of its own for Shire....more

Operating Agreement Dooms Derivative Claims by Deceased LLC Member’s Estate

by Farrell Fritz, P.C. on

In business divorce litigation, petitioners / plaintiffs often want to start the case with a bang. A common tactic is to file a petition / complaint simultaneously with an injunction motion. Often there is a real need for an...more

Nevada Supreme Court Accords Preclusive Effect To Subsequent Federal Court Order

by Allen Matkins on

When bad things happen to corporations, derivative suits are sure to follow. So it was for Galectin Therapeutics, Inc., a Nevada corporation. Following publication of allegations of a "stock promotion scheme", stockholders...more

Business Judgment Rule Applies to a Board’s Response to Take “All Necessary Actions”

What legal standard applies to assess a corporate board’s refusal to pursue litigation in response to a shareholder’s demand to take “all necessary actions” to correct alleged director misconduct?...more

New York Supreme Court Dismisses Derivate Suit, Finding That Shareholder's Letter Constituted A Demand And Business Judgment Rule...

by Shearman & Sterling LLP on

On March 23, 2018, Justice Charles E. Ramos of the Commercial Division of the New York Supreme Court dismissed with prejudice a purported derivative suit alleging that the board of Intercept Pharmaceuticals, Inc....more

Even as Data Breaches Continue to Increase, Obstacles Remain for Litigants Seeking to Pursue Securities Fraud and Derivative Suits

by Pepper Hamilton LLP on

Despite focused media coverage and a steady increase in the number of data breaches involving public companies, there has not been a corresponding increase in shareholder securities fraud and shareholder derivative claims...more

Breach Of Fiduciary Duty Does Not Always Lead To Damages

by Fox Rothschild LLP on

It is not uncommon for the Court of Chancery to find that a fiduciary duty was breached, but to award only nominal damages or no damages as a result of such breach. This is so because damages are not an element of a claim...more

Court Of Chancery Explains When Directors Lack Independence To Consider Pre-Suit Demand

by Morris James LLP on

In Re Oracle Corporation Derivative Litigation, C.A. No. 2017-037-SG (Del. Ch. Mar. 19, 2018) - Delaware law requires a derivative plaintiff to make a pre-suit demand on the board unless excused as futile. Because some...more

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

Seventh Circuit Considers Diversity Jurisdiction in Trust Dispute

by Foley & Lardner LLP on

In Doermer v. Oxford Fin’l Group, Ltd., No. 17-1659 (7th Cir. Mar. 7, 2018), the Seventh Circuit had before it an example of what Chief Judge Diane Wood called a “depressingly common” type of litigation: “[f]amily disputes...more

Appeals Court Reinstates Derivative Claims Dismissed for Conflict of Interest Where Parties’ Relationship Not “Especially...

by Farrell Fritz, P.C. on

Almost always there are elements of acrimony and intense emotion in litigation between co-owners of closely held business entities. The degree of toxicity can vary widely from case to case, although it tends to show up more...more

Court Of Chancery Holds Demand Is Not Excused When Only Best Practices Were Not Followed

by Morris James LLP on

Wilkin v. Narachi, C.A. 12412-VCMR (February 28, 2018) - Demand on directors is not required when it is alleged that they have violated a statute or rule. But when the claim is only that they violated the "best practices”...more

Delaware Corporate and Commercial Case Law Year In Review – 2017

by Morris James LLP on

This top ten list summarizes significant decisions of the Delaware Supreme Court and the Delaware Court of Chancery over the past calendar year. Our criteria for selection are that the decision either changed the law in a...more

The Next Big Thing: Data Breach Securities Class Action Litigation

Shareholders may have found a new hook for data security lawsuits. Over the past year, plaintiffs have filed nine federal class action securities fraud lawsuits against public companies after data security incidents,...more

The LLC Equitable Buyout: Past, Present, Future

by Farrell Fritz, P.C. on

Under the right set of facts, New York courts occasionally find remedies for LLC owners not explicitly authorized in the Limited Liability Company Law (“LLC Law”). Judges have a natural inclination to try to find solutions...more

Dismissal of Shareholder Derivative Action on Rule 23.1 Grounds Precludes Relitigation of Different Del. Plaintiffs

by Morris James LLP on

The Delaware Supreme Court recently issued an important corporate law decision addressing issue preclusion in the context of multiple shareholder derivative actions. The court ruled in California State Teachers’ Retirement...more

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