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Derivative Suit Conflicts of Interest

PilieroMazza PLLC

Managing Litigation Risk During the Business Lifecycle, Part 3: Derivative Actions

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While litigation risk is an unavoidable aspect of running a business, business owners can limit such risks with early planning. In this third installment of PilieroMazza’s blog series, “Managing Litigation Risk During the...more

Lathrop GPM

Delaware Supreme Court Clarifies Standard of Review for Conflicted Stockholder Transactions with In re Match Group Opinion

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On April 4, 2024, the Delaware Supreme Court issued its opinion in In re Match Group, Inc. Derivative Litigation, clarifying that the heightened entire fairness standard of review applies to judicial review of any transaction...more

Farrell Fritz, P.C.

The “Conflict of Interest” Defense to Shareholder Derivative Standing

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In shareholder derivative litigation, defendants occasionally argue that the plaintiff – who ostensibly sues on behalf of the company and its owners in a fiduciary capacity – has some form of conflict of interest with the...more

Goodwin

Delaware Chancery Court Reemphasizes Importance of Properly Handling Board Conflicts in Ruling for Elon Musk in SolarCity Case

Goodwin on

On April 28, 2022, Vice Chancellor Slights of the Delaware Chancery Court issued a verdict for the defense in In re Tesla Motors, Inc. Stockholder Litigation, a long-running derivative lawsuit challenging the 2016 acquisition...more

Goodwin

Delaware Court of Chancery Declines to Dismiss Investment Firm from Stockholder Derivative Suit

Goodwin on

Delaware Court of Chancery Declines to Dismiss Investment Firm from Stockholder Derivative Suit; Delaware Chancery Court Dismisses Majority of Claims Alleging that California Biotech Firm Profited from Nonpublic Information...more

Smith Anderson

Lawyers May Simultaneously Represent a Corporation and Its Directors Against Derivative Claims That Do Not Allege “Serious...

Smith Anderson on

In a case of first impression in North Carolina, a judge for the North Carolina Business Court was recently asked to decide whether a single law firm may simultaneously represent both a corporation and its individual...more

Winstead PC

Litigating Minority Shareholder Rights - Presentation

Winstead PC on

David F. Johnson presented his paper “Business Divorce: Minority Shareholder Rights In Texas” to the State Bar of Texas’s Business Disputes Course on September 2-3, 2021. This presentation addressed shareholder oppression...more

Patton Sullivan Brodehl LLP

LLC Derivative Claims — Sometimes It’s “Now or Never”

One substantial LLC membership right in California (and most other states) is the ability of members to file a “derivative” lawsuit. If the LLC has suffered harm, but the LLC fails to sue (due to managerial inaction,...more

Goodwin

New Amendment to Delaware General Corporation Law Solidifies Delaware’s Status as Welcoming of Benefit Corporations

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Since the 2013 adoption of a new subchapter to the Delaware General Corporation Law, which provided corporate entities the ability to be formed as, or convert into, a public benefit corporation, Delaware has been an...more

Skadden, Arps, Slate, Meagher & Flom LLP

Key Developments in Delaware Corporation Law

Consistent with trends in recent years, in 2019 Delaware corporation law largely was shaped by post-closing suits for money damages against directors who had approved mergers and acquisitions. Two Delaware Supreme Court...more

Farrell Fritz, P.C.

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

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

Proskauer Rose LLP

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

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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

Haight Brown & Bonesteel LLP

No Conflict in Successive Representation of a Closely-Held Company and Its Insiders Where Insiders Already Possess Company’s...

In Beachcomber Management Crystal Cove, LLC v. Superior Court (Salisbury) (No. G054078, filed June 28, 2017; pub. and mod. order July 28, 2017), the Fourth Appellate District granted a writ of mandate vacating a trial court’s...more

Farrell Fritz, P.C.

Suing on Behalf of People You’re Suing Can Sink a Derivative Lawsuit — Especially If You Have a Litigious Nature

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The U.S. reportedly has the world’s highest number of lawyers per capita (1 for every 300 people) and the 5th highest number of lawsuits per capita (74.5 for every 1,000 people, topped only by Germany, Sweden, Israel, and...more

A&O Shearman

M&A Watch: Court Questions Accelerated Vesting of Equity Compensation

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As we have previously reported, the Delaware Chancery Court recently dismissed the stockholder class action suit In re Columbia Pipeline Group, Inc. Stockholder Litigation, C.A. No. 12152-VCL (Del. Ch. Mar. 7, 2017),...more

Jackson Walker

Choice of Entity and Key Contents of Organization Documents

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Five Business Entity Forms: • Corporation • General Partnership • Limited Partnership • Limited Liability Partnership (“LLP”) • Limited Liability Company (“LLC”) ...more

Skadden, Arps, Slate, Meagher & Flom LLP

"Delaware Supreme Court Addresses Limited Partnership Drop-Down Transactions and Conflicts Committees"

The Delaware Supreme Court recently ruled on two appeals from Court of Chancery decisions involving "conflicts committees" of Delaware limited partnerships. Both decisions arise out of challenges to "drop-down" transactions...more

Morris James LLP

Court Of Chancery Rejects Settlement Because Of Named Plaintiff Conflict

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Smollar v. Potarazu, C.A. No. 10287-VCN (January 14, 2016) - This decision points out the hazard in providing a separate benefit to the named plaintiff in connection with the settlement of a derivative suit....more

Jackson Walker

Navigating Fiduciary Duties In Private Company Mergers And Acquisitions

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I. Introduction. The conduct of corporate directors and officers is subject to particular scrutiny in the context of business combinations (whether friendly or hostile), executive compensation and other affiliated...more

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