News & Analysis as of

Duty of Loyalty Shareholders

Activists at the Gate: Court of Chancery Weighs In on Claims Involving Activist Stockholders

Several recent decisions applying Delaware law offer helpful insight about the impact that activist investor involvement has on board decision-making leading to a transaction and how those decisions will be reviewed by the...more

Delaware Court Of Chancery Identifies Fiduciary Duty Constraints On Preferred Equity

by Cole Schotz on

A recent decision of the Delaware Court of Chancery (the “Court”) places certain fiduciary constraints on a company’s ability to satisfy its obligations to its preferred equity holders. While investors often seek to acquire...more

Court Of Chancery Declines To Hold Unocal Claim Automatically Excuses Demand

by Morris James LLP on

A derivative plaintiff who fails to make a pre-suit demand on the board must show why demand is excused using particularized facts. Here, the plaintiff argued that demand was automatically excused by sufficiently pleading a...more

Delaying a Bankruptcy for Shareholder Benefit May Benefit the Creditors After All

Equity holders and sponsors be wary - a new arrow may now be available in the quiver of potential causes of action that creditors and trustees can use to maximize their recovery in chapter 11 bankruptcy cases. In a recent...more

Home Depot Evades Shareholder’s Derivative Suit for 2014 Data Breach

by BakerHostetler on

Public companies that are proactively working to mitigate “cyber” risks and prepare to respond to potential incidents frequently ask whether a “breach” will lead to litigation, loss of customers, stock price decline, and...more

Home Depot Data Breach Derivative Suit Sent Home

Judge Thomas W. Thrash Jr. of the U.S. District Court of Georgia permanently shelved a derivative suit brought by shareholders of Home Depot. Home Depot is a multinational home improvement retailer. In September, 2014,...more

Shareholders’ Derivative Suit Against Home Depot Dismissed

On November 30, 2016, The Home Depot, Inc. (Home Depot) got a victory in the shareholders’ derivative suit filed against it for its alleged failure to institute necessary controls to secure its data relating to its 2014...more

Disregard of Speculative Financial Projections Was Not Bad Faith

by Morris James LLP on

In a stockholder challenge to a sale of the company, a plaintiff may rebut the business judgment rule by pleading facts that support a reasonable inference that at least half of the directors, who approved the sale, were not...more

Inside M&A - October 2015

by McDermott Will & Emery on

Overview of SPACs and Latest Trends - A number of recent successful business combination transactions involving special-purpose acquisition companies (SPACs) led by prominent sponsors have driven a resurgence in the SPAC...more

France: The Versailles Court of Appeal fine-tunes the duty of loyalty owed by Managing Directors

by Reed Smith on

A Managing Director of a French Société Anonyme has a statutory duty of loyalty towards the shareholders of such company. This principle was set in stone by a ruling of the French Supreme Court (Cour de cassation) in 1996. It...more

Delaware Chancery Court Permits Shareholder to Bring Fiduciary Claim for Board’s Violation of a Stock Incentive Plan

by Katten Muchin Rosenman LLP on

On November 8, the Delaware Chancery Court denied a motion to dismiss a derivative action brought by a shareholder of Healthways, Inc. against the company’s president, Ben Leedle, Jr., and the board of directors for approving...more

Delaware Chancery Court Dismisses Class Action Lawsuit Over Sale of Warehouse Club

by Holland & Knight LLP on

On January 31, 2013, the Delaware Chancery Court dismissed a shareholder class action in which the plaintiffs alleged that the directors of a warehouse club retailer had breached their fiduciary duties by agreeing to a buyout...more

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Cybersecurity

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