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Derivative Suit Standard of Review

A&O Shearman

Delaware Court Of Chancery Holds Stockholder Vote Following Post-Trial Decision Cannot Retroactively Ratify A Transaction That...

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As we previously reported, in January 2024, the Court held in a stockholder derivative suit against the CEO and directors of a sustainable energy and electric vehicle company (the “Company”) that a record-setting $55.8...more

Troutman Pepper Locke

Delaware Supreme Court Confirms Dual MFW Protections Are Needed Outside of the Freeze-Out Merger Context for Application of...

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In In re Match Group, Inc. Derivative Litigation, the Delaware Supreme Court held that the dual procedural protections announced in the seminal case of Kahn v. M & F Worldwide Corp. (MFW) are required in order to shift the...more

A&O Shearman

Delaware Supreme Court Holds MFW Is Applicable To Controlling Stockholder Transactions Even Outside Of Freeze-Out Context

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On April 4, 2024, in an opinion authored by Chief Justice Collins J. Seitz, Jr., the Supreme Court of Delaware sitting en banc held that the framework articulated in Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014)...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

A&O Shearman

Delaware Court Of Chancery Declines To Dismiss Claims Related To Direct Offering At The Outset Of The Pandemic

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On June 30, 2022, Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery denied a motion to dismiss stockholder derivative claims for alleged breaches of fiduciary duty against the CEO/Chairman of an...more

A&O Shearman

Delaware Court Of Chancery Denies Motion To Dismiss Breach Of Fiduciary Duty And Unjust Enrichment Claims Related To Compensation...

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On April 27, 2022, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery denied, in part, a motion to dismiss a derivative complaint against directors for breaches of fiduciary duties brought by stockholders of...more

A&O Shearman

Finding That Allegedly Conflicted Acquisition Satisfied Entire Fairness Review, Delaware Court Of Chancery Rejects Breach Of...

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On April 27, 2022, Vice Chancellor Joseph R. Slights III of the Delaware Court of Chancery entered judgment in favor of defendant, the CEO/Founder and then-Chairman (the “Chairman”) of Tesla Motors, Inc. (the “Company”),...more

Goodwin

SCOTUS Grants Certiorari to Decide Whether Automatic Discovery Stay Applies to Securities Act Cases in State Court

Goodwin on

SCOTUS Grants Certiorari to Decide Whether Automatic Discovery Stay Applies to Securities Act Cases in State Court; Delaware Court of Chancery Dismisses Stockholder Suit Against FedEx for Failure to Make Pre-Litigation...more

Allen Matkins

Does Caremark Apply To California Corporations?

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Chancellor William T. Allen famously observed that a derivative claim based on a board's failure of oversight "is possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgment." In...more

A&O Shearman

Delaware Court Of Chancery Denies Stay Sought By Special Litigation Committee Appointed By Conflicted General Partner

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On August 28, 2019, Vice Chancellor Joseph R. Slights III of the Delaware Court of Chancery denied a motion to stay filed by the special litigation committee formed by defendant Blue Bell Creameries, Inc. (“BBGP”) in...more

A&O Shearman

Delaware Court Of Chancery Dismisses Caremark Claim, Finding Consumer Class Action Settlement Was Not A "Red Flag" For Consumer...

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On July 29, 2019, Chancellor Andre G. Bouchard of the Delaware Court of Chancery dismissed a stockholder derivative action asserting breaches of fiduciary duty claims against the directors of J.C. Penney Company, Inc. for...more

A&O Shearman

Delaware Court Of Chancery Denies Motion To Dismiss Fiduciary Duty Breach Claims Related To Repricing Of Stock Options

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On June 13, 2019, Vice Chancellor Kathaleen S. McCormick of the Delaware Court of Chancery largely denied a motion to dismiss a derivative action for breach of fiduciary duty and unjust enrichment against directors and...more

Allen Matkins

Does California Side With Delaware Or New York On Special Litigation Committee Reviews?

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As discussed in the two preceding posts, Nevada’s Supreme Court last week decided to adopt New York’s standard of review of special litigation committee recommendations to dismiss stockholder derivative suits. In re Dish...more

Skadden, Arps, Slate, Meagher & Flom LLP

Insights: The Delaware Edition - May 2016

This issue focuses on important, developing areas of Delaware corporation law and deal litigation, including the Court of Chancery’s clarification of its evolving views about disclosure-based deal litigation settlements;...more

Skadden, Arps, Slate, Meagher & Flom LLP

"Court of Chancery Addresses Fundamental Issues of Derivative Litigation"

The Delaware Court of Chancery recently issued a trio of notable opinions involving stockholder derivative actions. The opinions addressed fundamental issues of law such as whether particular kinds of stockholder claims are...more

Allen Matkins

The Most Important Principles of Delaware Corporate Law Can’t Be Found In the DGCL

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I have often observed that you can read every section of the Delaware General Corporation Law and learn almost nothing about Delaware corporate law.  Here are three of the most fundamental principles of Delaware corporate law...more

Morris James LLP

Court of Chancery Dismisses Derivative Claims Even Though Entire Fairness Arguably Applied

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Delaware’s requirements for stockholders to maintain derivative actions reflect the twin principles of director management and control and accountability. Because directors manage the business and affairs of Delaware...more

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