News & Analysis as of

Motion to Dismiss Breach of Duty Derivative Suit

Morris James LLP

Chancery Denies Motion to Dismiss Finding Primedia Argument Inapplicable

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In Re Orbit/FR, Inc. Stockholders Litig., C.A. No. 2018-0340-SG (Del. Ch. January 9, 2023) - In In re Primedia, Inc. S’holders Litig., 67 A.3d 455 (Del. Ch. 2013), the Court examined whether a litigation asset being...more

Morris James LLP

Delaware Corporate and Commercial Case Law Year in Review - February 2023

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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 meaningfully changed...more

Dechert LLP

Securities & Derivative Litigation: Quarterly Update - Q4 2021

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In 2021, securities class actions declined compared to the year before, and were significantly less than the number of filings in the previous three years. According to statistics from the Stanford Law School Securities Class...more

Goodwin

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

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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

Morris James LLP

Chancery Dismisses Conclusory Allegations of Gross Negligence and Disloyalty Against Oracle Officers and Directors Related to...

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In re Oracle Corp. Derv. Litig., C.A. No. 2017-0337-SG (Del. Ch. June 21, 2021) - While Delaware maintains a notice pleading standard, this decision reflects that conclusory allegations of breach of fiduciary duty leveled...more

Goodwin

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

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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

Goodwin

Massachusetts Superior Court BLS Finds No Duty To Disclose Alleged Preliminary Merger Discussions

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Massachusetts Superior Court BLS Finds No Duty to Disclose Alleged Preliminary Merger Discussions, Northern District of California Declines to Dismiss Oracle Fraud Class Action Suit, SCOTUS Hears Oral Argument in Goldman...more

Goodwin

SEC’s Disgorgement Authority Expanded Under National Defense Authorization Act for Fiscal Year 2021

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SEC’s Disgorgement Authority Expanded Under National Defense Authorization Act for Fiscal Year 2021; Delaware Court of Chancery Rejects Derivative Claim Based On Deficient Anti-Money Laundering Compliance Efforts: “Bad...more

Skadden, Arps, Slate, Meagher & Flom LLP

Delaware Courts Examine Caremark After Marchand and Clovis

In 2019, the Delaware Supreme Court issued Marchand v. Barnhill, which was soon followed by the Court of Chancery’s opinion in In re Clovis Oncology Derivative Litigation. Both rulings sustained derivative claims for breach...more

Winstead PC

Court Addressed A Shareholder Derivative Suit Against Officers And Directors For Self-Interested Transactions, Misuse Of Company...

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In Roels v. Valkenaar, a shareholder filed a shareholder derivative suit against former and current officers and directors of the company based on multiple claims of breach of fiduciary duty. No. 03-19-00502-CV, 2020 Tex....more

BCLP

Delaware Court of Chancery Again Declines to Dismiss a Caremark Oversight Failure Claim

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On April 27, 2020, the Delaware Court of Chancery for the third time in a year denied a motion to dismiss a Caremark claim. The case, Hughes v. Hu, involves a derivative claim against the audit committee and officers of a...more

Sheppard Mullin Richter & Hampton LLP

Delaware Court of Chancery Addresses Pleading ‘With Particularity’ Under Rule 23.1

Rule 23.1 of the Delaware Court of Chancery Rules requires a plaintiff asserting a shareholder derivative action to plead “with particularity the efforts, if any, made by the plaintiff to obtain the action the plaintiff...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

Patterson Belknap Webb & Tyler LLP

Commercial Division Closes Door to Derivative Claims on Behalf of Cancelled LLC

The Commercial Division recently ruled, in a case captioned as Hopkins v. Ackerman, that derivative claims on behalf of an LLC need to be brought before the LLC ceases to exist. ...more

K&L Gates LLP

Another “Well-Pled” Caremark Claim Survives A Motion To Dismiss: Lessons From Recent Cases On Risk Management, Compliance Systems,...

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In a recent decision, In Re Clovis Oncology, Inc. Derivative Litigation, the Delaware Court of Chancery held that stockholders of Clovis Oncology, Inc. (“Clovis”), a developmental biopharmaceutical company, adequately pled...more

A&O Shearman

Delaware Court Of Chancery Dismisses Caremark Claims Against Directors After Company Publicly Disclosed Misconduct

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On October 31, 2019, Vice Chancellor Kathaleen S. McCormick of the Delaware Court of Chancery dismissed a stockholder derivative suit against the directors of LendingClub Corporation for failure to plead demand futility. In...more

Farrell Fritz, P.C.

Shareholders Beware: Serve Pre-Litigation Demands or Be Prepared to Plead Demand Futility with Particularity

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In a recent case, Gammel v Immelt (2019 NY Slip Op 32005[U]), shareholders of General Electric Company (GE), brought a derivative shareholder action against the members of GE’s board of directors and various committees...more

Morris James LLP

Chancery Declines to Stay or Dismiss Second-Filed Derivative Suit Against Google’s Parent Company

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Irving Firemen’s Relief and Ret. Fund v. Page, C.A. No. 2019-0355-SG (Del. Ch. Jul. 1, 2019). Delaware courts typically apply the McWane first-filed doctrine to stay a later-filed Delaware case in favor of a case already...more

Morris James LLP

Chancery Addresses the Direct and Derivative Claim Distinction and Demand Futility in the LLC Context

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Stone & Paper Investors LLC v. Blanch, C.A. No. 2018-0394-TMR (Del. Ch. May 31, 2019). Plaintiff sued Defendants, who were supposed to manage the parties’ limited liability company, directly and derivatively for breaching...more

Skadden, Arps, Slate, Meagher & Flom LLP

Delaware Court Precludes Creditors of Limited Partnership From Pursuing Derivative Claims

In several cases since the seminal 2011 Delaware Supreme Court decision CML V LLC v. Bax, which held that creditors of Delaware LLCs lack standing to pursue derivative claims, the U.S. Bankruptcy Court for the District of...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

K&L Gates LLP

In Rejecting Defendants’ Motion For Dismissal, Chancery Court Finds That Individual Fiduciary May Be Held Liable For Trades That...

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In the consolidated stockholder derivative litigation, In re Fitbit, Inc., CA No. 2017-0402-JRS (Del. Ch. Dec. 14, 2018), the Delaware Court of Chancery denied the Defendants’ motion to dismiss Plaintiffs’ insider trading and...more

Winstead PC

Federal District Court Held That A Shareholder Of A Company Did Not Owe Fiduciary Duties To The Company Regarding A Transfer Of...

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In Liberty Bankers Life Ins. Co. v. Lenhard, a company sued its former chief executive officer and shareholder for breaching fiduciary duties and fraudulent statements regarding an agreement to transfer his stock in the...more

Dechert LLP

U.S. Court Not Bound by Korean Law Conferring Exclusive Jurisdiction in Shareholder’s Derivative Actions

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Shareholder of a Korean corporation (“Cuzco Korea”), the sole member of a chapter 11 limited liability company debtor (“Cuzco USA” or the “Debtor”), brought an adversary proceeding against the Debtor and others, asserting...more

Morris James LLP

Delaware Supreme Court Explains When Derivative Case May Be Dismissed

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City of Birmingham Retirement and Relief System v. Good, No. 16, 2017 (December 15, 2017) - This decision explains again that actual or constructive knowledge of persistent corporate wrongdoing is needed before there is a...more

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