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Effective August 1, 2022, Section 102(b)(7) of the Delaware General Corporation Law (DGCL) was amended to permit a Delaware corporation to include in its charter a provision eliminating or limiting the personal liability of...more
Section 800 of the California Corporations Code applies to actions brought in the name of any domestic or foreign corporation, aka derivative actions. It is similar, but not the same as, Delaware Court of Chancery Rule 23.1...more
Last year, the Delaware Supreme Court adopted a tripartite test for assessing demand futility allegations in derivative actions. United Food & Commercial Workers Union v. Zuckerberg 262 A.3d 1034 (Del. 2021). Under this...more
On May 13, 2022, Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery dismissed certain stockholder derivative claims for breaches of fiduciary duty brought against the founder-CEO and other directors of...more
In January 2018, the media began reporting on two security vulnerabilities affecting Intel Corporation's microprocessors - dubbed "Spectre" and "Meltdown". Following these disclosures, Intel's stock price fell and its...more
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
Seyfarth Synopsis: The Delaware Chancery Court’s October 1 In re Clovis decision marks the second time in 2019 that a Delaware court has permitted a Caremark duty-to-monitor derivative claim against directors—considered...more
In a wide ranging derivative action, a Facebook shareholder has filed a 193 page complaint in the Delaware Court of Chancery alleging three Facebook directors sold a total of $1.5 billion of stock while in possession of...more
In Inter-Marketing Group USA, Inc. v. Armstrong, the Delaware Court of Chancery dismissed a derivative suit brought on behalf of a Delaware limited partnership because the plaintiff failed to make demand or show that demand...more
This top ten list summarizes significant decisions of the Delaware Supreme Court and the Delaware Court of Chancery over the past calendar year 2018. The cases selected either meaningfully changed Delaware law or provided...more
Busch v. Richardson, C.A. 2017-0868-AGB (November 14, 2018) - A derivative complaint that meets the demand requirements of Rule 23.1 may be subject to later dismissal at the request of a properly formed and functioning...more
Tilden v. Cunningham, C.A. 2017-0837-JRS (October 26, 2018) - This is an interesting decision for many reasons. It includes a comprehensive analysis of when demand on a board is not excused, when ignoring a forum selection...more
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
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
On September 29, 2017, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery granted in part and denied in part a motion to dismiss derivative claims for breach of fiduciary duty against the board of foreign...more
Morris James attorneys Lewis Lazarus, Albert Manwaring and Albert Carroll authored an article published in Transaction Advisors titled Delaware Corporate and Commercial Case Law Year in Review – 2016. The article summarizes...more
Our Delaware Corporate and Alternative Entity Law attorneys closely followed the opinions coming from Delaware’s Supreme Court and Court of Chancery. Our 2016 Year in Review is a collection of brief summaries of selected...more
The Delaware Supreme Court requested further consideration of the federal due-process issues that might arise where a court is asked to hold that a shareholder derivative action is precluded because a prior derivative action...more
On November 30, 2016, a federal district court dismissed a shareholder derivative complaint against various current and former directors of Home Depot arising from the well-publicized data breach the company suffered between...more
Even after a board rejects a plaintiff-stockholder’s demand to bring a derivative litigation, the plaintiff may proceed to bring that derivative action if the plaintiff can show the demand was “wrongful.” Having conceded...more
The Delaware courts encourage plaintiffs who bring derivative claims in Delaware without making demand on the board of directors to seek books and records under Section 220 of the Delaware General Corporation Law so as to be...more
The hurdles for claims against directors for failed oversight in connection with data breaches continue to increase. On July 7, 2016, District of Minnesota Judge Paul Magnuson released derivative claims against top Target...more
This is an important and useful decision for at least two reasons. First, the Court carefully analyzes past Delaware precedent to conclude that the entire fairness test applies not just to squeeze-out mergers, but also to...more
Deciding if a director is sufficiently tied to a controller so as to be disqualified from passing on a transaction independently is an important decision because it may determine if a derivative suit meets the demand excuse...more
On May 4, 2015, Vice Chancellor Travis Laster of the Delaware Court of Chancery issued a decision in Quadrant Structured Products Co., Ltd. v. Vertin, analyzing creditors’ standing to bring derivative claims against directors...more