News & Analysis as of

Derivative Suit

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

Delaware Court Of Chancery Invalidates Written Consent Of The Majority Of Common Stockholders Purporting To Remove And Replace CEO...

by Shearman & Sterling LLP on

On January 10, 2018, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery granted a motion for judgment on the pleadings to plaintiffs, the CEO and another director of TradingScreen Inc., invalidating a written...more

Delaware Supreme Court Affirms Dismissal Of Stockholder Derivative Claims On Issue Preclusion Grounds Based On A Demand-Futility...

by Shearman & Sterling LLP on

On January 25, 2018, the Supreme Court of Delaware ruled that the Court of Chancery’s dismissal on issue preclusion grounds of the derivative claims of stockholder plaintiffs against the directors of Wal-Mart Stores, Inc....more

Delaware Supreme Court Issues Opinion Affirming the Preclusive Effect of a Prior Dismissal of Derivative Claims on Demand-Futility...

The Delaware Supreme Court recently unanimously affirmed the Delaware Court of Chancery's dismissal of a stockholder derivative claim against directors of Wal-Mart, holding that these claims were precluded because a federal...more

Delaware Supreme Court Confirms Preclusive Effect of Dismissal of Derivative Actions Based on Lack of Demand Futility

by Proskauer Rose LLP on

The Delaware Supreme Court held yesterday that the dismissal of a shareholder derivative action for lack of demand futility can preclude other derivative actions as long as the plaintiff in the dismissed case adequately...more

Delaware Supreme Court Gives Preclusive Affect To Prior Dismissal In Wal-Mart Derivative Litigation

by Morris James LLP on

California State Teachers Retirement System v. Alvarez, No. 295, 2016 (Del. Jan. 25, 2018) - This is an important decision clarifying the rules regarding the preclusive effect a dismissal of a derivative suit may have on a...more

Delaware Supreme Court Affirms Decision That Well-Pled Unocal Claim Does Not Automatically Excuse Pre-Suit Demand

by Shearman & Sterling LLP on

On December 18, 2017, the Supreme Court of Delaware affirmed the Delaware Court of Chancery’s dismissal of a shareholder derivative action asserting that the directors of The Williams Companies, Inc. (“Williams”) breached...more

Winter Case Notes: LLC Deadlock and Other Recent Decisions of Interest

by Farrell Fritz, P.C. on

This winter forever will be remembered in the Northeast as the winter of the “bomb cyclone,” which gets credit for the 6º temperature and bone-chilling winds howling outside as I write this. So in its honor, I’m accelerating...more

Second Department Affirms Commercial Division Decisions Leaving Withdrawing LLC Members Without Compensation for Their Membership...

In Matter of Jacobs v. Cartalemi, No. 2016-05041, 2017 BL 435890 (2d Dep’t Dec. 6, 2017) (“Jacobs I”), a unanimous Appellate Division, Second Department panel affirmed an order by Westchester County Commercial Division...more

Plaintiffs File Amended Complaint Against Yahoo! But Is Something Missing?

by Allen Matkins on

Last spring, a derivative suit was filed in California Superior Court against certain of current and former directors and officers of Yahoo!, Inc. alleging breach of fiduciary duty in connection with the company's widely...more

Caremark Claims Analyzed By Delaware Court Of Chancery

by Fox Rothschild LLP on

In the recent decision of Oklahoma Firefighters Pension & Retirement System v. Corbett, C.A. No. 12151-VCG (Del. Ch. Dec. 18, 2017), the Delaware Court of Chancery provided a scholarly review of Caremark claims. In sum, the...more

California Court of Appeal Holds that Demand Futility Must be Reassessed at Time of Filing of Amended Complaint

In Apple Inc. v. Superior Court, No. H044133, 2017 WL 6275830 (Cal. App. Dec. 11, 2017), the California Court of Appeal, Sixth District, considered whether a plaintiff asserting a shareholder derivative lawsuit must plead...more

Risky Business: Protecting the Assets of Directors

by Pepper Hamilton LLP on

Directors and officers are exposed to potential liability from suits by the company, shareholders, and debt holders, among others. There are, however, a number of protections available to protect the assets of directors and...more

Delaware Supreme Court Reins in Stockholder Ratification of Director Compensation

• Directors were not entitled to stockholder ratification defense where stockholders only approved the general parameters of director and employee bonuses • This marks the first time in nearly 60 years that Delaware’s...more

Delaware Supreme Court Defines “Collusion”

by Allen Matkins on

A couple of years ago, I taught Administrative Law at the University of California, Irvine School of Law. One of the many theories that we covered was the idea of “regulatory capture”. This is a “term coined by public...more

Court Of Chancery Explains Caremark Claims

by Morris James LLP on

Oklahoma Firefighters Pension & Retirement System v. Corbett, C.A. 12151-VCG (December 18, 2017) - This decision is an exhaustive review of what constitutes a Caremark claim. It makes it clear that merely because the...more

Delaware Supreme Court Explains When Derivative Case May Be Dismissed

by Morris James LLP on

City of Birmingham Retirement and Relief System v. Good, No. 16, 2017 (December 15, 2017) - This decision explains again that actual or constructive knowledge of persistent corporate wrongdoing is needed before there is a...more

Reversing A Dismissal, Delaware Supreme Court Declines To Apply Ratification Defense For Discretionary Compensation Awards Under...

by Shearman & Sterling LLP on

On December 13, 2017, the Delaware Supreme Court reversed the Court of Chancery’s dismissal of fiduciary duty breach claims brought derivatively by stockholders of Investors Bancorp, Inc. against its directors in connection...more

Your Daily Dose of Financial News

by Robins Kaplan LLP on

As widely expected, the Fed affirmed the general strength of the US economy today by raising the benchmark interest rate again today—the 5th raise since the financial crisis....more

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

by Farrell Fritz, P.C. on

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

Court of Appeals Ruling Eases the Way for Shareholders to Bring Derivative Suits Against Cayman Islands Companies in the New York...

On Nov. 20, 2017, the New York Court of Appeals held that in a derivative action brought in a New York court against a company incorporated in the Cayman Islands, the plaintiff need not comply with Rule 12A of the Cayman...more

Delaware Supreme Court Affirms Finding Of Failure To Allege Demand Futility Based On Board Composition Days After Complaint Was...

by Shearman & Sterling LLP on

On November 27, 2017, the Delaware Supreme Court affirmed a decision by the Delaware Court of Chancery dismissing a stockholder derivative complaint against certain directors and officers of BioScrip, Inc. for failing to...more

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