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Minority Shareholders Shareholder Litigation

Venable LLP

Fiduciary Liability Limitations Under Nevada Law Trigger Entire Fairness Review of Conversion from Delaware Due to Controlling...

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The Delaware Court of Chancery, in Palkon v. Maffei, et al., C.A. No. 2023-0449-JTL (Del. Ch. Feb. 20, 2024), determined that a reduction in the liability exposure of a fiduciary due to the conversion of a Delaware...more

Farrell Fritz, P.C.

Winter Case Notes: Murder, Forgery, Accidental Death, Oppression, Oh My!

Farrell Fritz, P.C. on

Welcome to this year’s Winter Case Notes where, amidst the arctic blast currently sweeping most of the nation, I offer shortish takes on several court decisions in recent business divorce cases. This year’s edition...more

Skadden, Arps, Slate, Meagher & Flom LLP

Post-Trial Oracle Ruling Provides a Roadmap for Navigating Transactions With an Influential Fiduciary on Both Sides of the Deal

The mere potential for a prominent, highly respected officer, director and minority holder to influence a board’s decision to approve a deal where the minority holder sits on both sides is insufficient to confer controller...more

Allen Matkins

A Preference For Minority Rule?

Allen Matkins on

Section 204(a)(9) of the California Corporations Code allows the articles of incorporation to include a provision requiring the approval of the shareholders (Section 153) or the approval of the outstanding shares (Section...more

Winstead PC

Appellate Court Grants Mandamus Relief To Require A Jury Trial On The Issue Of Whether The Inspection Of Books And Records Of A...

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A common complaint of a minority shareholder is the denial of access to the corporation’s books and records. A shareholder enjoys the right to examine and copy certain records of the corporation in which the shareholder owns...more

Fenwick & West LLP

Delaware Supreme Court Holds That Dilution Claims Against a Controller Are Solely Derivative, Overruling Prior Precedent

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On September 20, 2021, the Delaware Supreme Court took the highly unusual step of overruling its prior decision in Gentile v. Rossette. An oft-criticized precedent from 2006, Gentile created an exception allowing minority...more

Winstead PC

Litigating Minority Shareholder Rights - Presentation

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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

Robins Kaplan LLP

The Robins Kaplan Spotlight, Vol. 6 No. 2, Spring 2021 - Family Feud: A Cautionary Tale of the Costs, Risks, and Uncertainty of...

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There is no shortage of ways in which parties in closely held corporations or partnerships can find themselves at odds. Those shareholders who control the majority of a company’s stock generally set the corporate strategies...more

Cadwalader, Wickersham & Taft LLP

Delaware Court of Chancery Further Clarifies the “Ab Initio” Requirement in Finding That Discussions Between the Controlling...

In In re HomeFed Corp. Stockholder Litigation (“HomeFed”), the Delaware Court of Chancery considered on a motion to dismiss whether a squeeze-out merger by a controlling stockholder complied with the procedural framework set...more

Sheppard Mullin Richter & Hampton LLP

Board Guidance: Getting To Business Judgment Rule Deference When You Have A Controlling Stockholder

IN RE DELL TECHNOLOGIES INC. CLASS V STOCKHOLDERS LITIGATION There has been a growing deference in Delaware courts for transactions approved by independent special committees and minority stockholders. In the context of a...more

Vinson & Elkins LLP

In re Pace Industries, LLC: Minority Shareholder With Bankruptcy Consent Rights Considered Controlling Minority Shareholder With...

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A recent bench ruling in In re Pace Industries, LLC1 by Judge Walrath for the Bankruptcy Court for the District of Delaware (the “Court”) has validated a chapter 11 bankruptcy filing by certain debtors in the jointly...more

Dechert LLP

Delaware Court of Chancery Adopts New Framework for Determining whether to Join Minority Stockholders with a Controlling...

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In a decision of interest to private equity investors, the Delaware Court of Chancery (the “Court”) adopted a new framework for determining whether minority stockholders are part of a control group with a separately...more

Winstead PC

Shareholder Oppression Claims: Looking Past the Urban Myth to Remedies that Continue to Survive in The Real World of Texas Law

Winstead PC on

Many Texas lawyers and their private company clients continue to refer to the claim for shareholder oppression as if it remains a viable cause of action under Texas law. And yet, for all practical purposes, the claim for...more

Farrell Fritz, P.C.

Summer Shorts: LLC Minority Member Oppression and Other Decisions of Interest

Farrell Fritz, P.C. on

It’s that time of year again, when I offer some lighter fare for poolside consumption consisting of summaries of a few recent decisions of interest involving disputes between business co-owners....more

Allen Matkins

Section 1800 And The Case Of The Little Shareholder That Could

Allen Matkins on

Section 1800 of the California Corporations Code provides a procedure for the involuntary dissolution of a corporation. The process begins with the filing of a verified complaint, but only those persons listed in the statute...more

Morris James LLP

Chancery Enjoins Unfair Merger Orchestrated by Controlling Stockholder Pending Corrective Disclosures

Morris James LLP on

Under Delaware law, majority or controlling stockholders owe fiduciary duties to the company and its minority stockholders. Under certain circumstances, however, a stockholder that owns less than 50 percent of the company’s...more

White & Case LLP

Stock Market Class Action: New protection system of minority shareholders on takeovers in breach of the Securities Market Law

White & Case LLP on

On March 19, 2019 a law initiative of Senator Ricardo Monreal Ávila was published in the Parliamentary Gazette of the Senate with a decree project, by means of which certain provisions of the Federal Civil Proceedings Code...more

Morris James LLP

Chancery Finds Controlling Stockholder Impliedly Consented to Jurisdiction Through Board’s Adoption of Delaware Forum-Selection...

Morris James LLP on

In re Pilgrim’s Pride Corp. Derivative Litigation, Consol. C.A. No. 2018-0058-JTL (Del. Ch. Mar. 15, 2019). Stockholders that control Delaware corporations find themselves subject to fiduciary duties. According to this...more

Farrell Fritz, P.C.

Winter Case Notes: Oppression of the “Gifted” Minority Shareholder and Other Recent Decisions of Interest

Farrell Fritz, P.C. on

Notwithstanding we’ve had no more than a dusting of snow thus far in my downstate New York neck of the woods, welcome to another edition of Winter Case Notes in which I visit my backlog of recent court decisions of interest...more

Sheppard Mullin Richter & Hampton LLP

Getting to Business Judgment in an Interested Transaction: Controlling Stockholder Must Put Procedural Protections in Place Prior...

In Flood v. Synutra Int’l, Inc., No. 101, 2018, 2018 Del. LEXIS 460 (Del. Oct. 9, 2018), the Delaware Supreme Court (Strine, C.J.) held that a controlling stockholder who pursues a merger with the controlled company will have...more

A&O Shearman

Delaware Court Of Chancery Grants Minority Stockholder's Section 220 Demand As To Emails But Denies Access To Merger-Related...

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On July 30, 2018, Vice Chancellor Tamika Montgomery-Reeves of the Delaware Court of Chancery partially granted a Section 220 demand for the books and records of Globalstar, Inc. brought by the company’s largest minority...more

Brooks Pierce

Shareholder Inspection Rights for Closely Held Corporations

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The North Carolina Business Court recently strengthened the hands of minority shareholders in closely-held corporations. N.C. Gen. Stat. § 55-16-02(b) affords qualified shareholders the right to “inspect and copy: (1)...more

Wilson Sonsini Goodrich & Rosati

New York Court Finds Failure to Meet MFW Standard in Controlling Stockholder Merger

In another significant M&A decision from the New York Supreme Court, the controlling stockholder of a Delaware corporation failed to obtain judicial deference under the so-called "MFW" framework for its merger with the...more

A&O Shearman

Who’s the Boss? Minority Stockholders That Exercise Control

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In two recent cases, the Delaware Court of Chancery provided informative guidance on when stockholders that hold less than 50% of a corporation’s stock are nevertheless considered to be controlling stockholders. This inquiry...more

Cadwalader, Wickersham & Taft LLP

Delaware Chancery Court Finds Elon Musk May Be Controlling Stockholder of Tesla Motors

On March 28, 2018, in In re Tesla Motors, Inc. Stockholder Litigation, the Delaware Court of Chancery denied a motion to dismiss a lawsuit brought by stockholders of Tesla Motors, Inc. (“Tesla” or the “Company”)....more

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