News & Analysis as of

Shareholder Litigation

Court of Chancery Declines To Restrain Controller In Proposed Viacom-CBS Deal

by Morris James LLP on

CBS Corp., et al. v. National Amusements, Inc., et al., C.A. No. 2018-0342-AGB (Del. Ch. May 17, 2018) (Letter Op.) - Arising out of the highly-publicized dispute over the proposed transaction involving CBS and Viacom,...more

Update on BofI Whistleblower Litigation

We previously reported in March and last October on a whistleblower litigation brought by Charles Erhart, a former Bank of Internet Holding, Inc. (BofI) internal auditor. On December 3, 2015, in a separate action, the...more

Caremark Claims And California

by Allen Matkins on

A popular claim for plaintiffs in derivative litigation against directors of Delaware corporations has been that the directors breached their duty of oversight. This theory has its genesis in Chancellor William T. Allen's...more

Attention Forum Shoppers! Blue Light Special in the Ninth Circuit!

by Shearman & Sterling LLP on

On April 20, 2018, the Court of Appeals for the Ninth Circuit split from five other circuit courts in Varjabedian v. Emulex Corp., No. 16-55088 (9th Cir. Apr. 20, 2018), by holding that claims under Section 14(e) of the...more

New York and Washington Courts Issue Important Decisions Relating to M&A and Stockholder Nominations of Directors

Two courts recently issued significant corporate law decisions that are meaningful for corporations and investors navigating an M&A transaction or a proxy contest. Interestingly, both decisions arose outside of Delaware,...more

Ninth Circuit Splits from Five Other Circuits; Requires Only a Showing of Negligence for Claims Under Section 14(e) of the...

by Ropes & Gray LLP on

On April 20, 2018, in Varjabedian v. Emulex Corp., the Ninth Circuit held that Section 14(e) of the Securities Exchange Act of 1934 requires only a showing of negligence, rather than scienter, in connection with a disclosure...more

Director compensation limits and considerations

by Dentons on

A recent ruling by the Delaware Supreme Court could have far-reaching consequences for how companies set their director compensation limits. ...more

Further Developments in Icahn’s & Deason’s Battle Against Xerox

by Shearman & Sterling LLP on

We previously released an M&A Watch note detailing the recent NY decision of In re Xerox Corporation Consolidated Shareholder Litigation and the subsequent settlement agreement entered into between activist investors Carl...more

Do Shareholders Need to Make a Demand Upon the Board of Directors Before Filing Suit on a Family-Owned Corporation’s Behalf?

by Murtha Cullina on

When a shareholder claims that a director or officer has harmed a corporation through his or her improper conduct, these claims typically must be brought through a derivative action, in which the shareholder sues on behalf of...more

Commercial Division Enjoins Xerox-Fujifilm Deal Resulting In Resignation of Xerox’s CEO

On April 27, 2018, Justice Barry Ostrager of the Commercial Division enjoined a no-cash transaction that would have granted Fujifilm (“Fuji”) a 50.1% controlling interest in Xerox. ...more

When Demanding Inspection, Don't Overlook The Demand

by Allen Matkins on

The wheels of justice turn slowly. Two years ago, I wrote about Judge Robert C. Jones's ruling in Weinfeld v. Minor, 2016 U.S. Dist. LEXIS 30117 (D. Nev. Mar. 8, 2016). In that ruling, Judge Jones tackled tackled the...more

Ninth Circuit Holds That Section 14(e) Of The Exchange Act Requires Showing Of Negligence, Not Scienter, In Departure From Other...

by Shearman & Sterling LLP on

On April 20, 2018, the United States Court of Appeals for the Ninth Circuit held that scienter is not required for securities claims brought under Section 14(e) of the Securities Exchange Act of 1934. Varjabedian v. Emulex...more

Delaware Supreme Court Affirms Court Of Chancery Appraisal Determination At Nearly 60% Discount To Deal Price

by Shearman & Sterling LLP on

On April 23, 2018, the Supreme Court of Delaware affirmed a decision by Vice Chancellor J. Travis Laster of the Delaware Court of Chancery appraising the shares of Clearwire Corporation at $2.13 per share, notwithstanding...more

Southern District Of New York Dismisses Action Over Optimistic Statements About Proposed Merger Brought By Investors Who Sold...

by Shearman & Sterling LLP on

On April 20, 2018, Judge William H. Pauley III of the United States District Court for the Southern District of New York dismissed a class action against defendants GFI Group, Inc. (“GFI”) and certain executives of GFI,...more

Saudi Arabia Update – April 2018

by Dentons on

Companies Law amended - The Council of Ministers approved 11 amendments to the Companies Law on 10 April 2018 (the Amendments) – a brief summary is below. Companies established in Saudi Arabia should consider reviewing...more

Who’s the Boss? Minority Stockholders That Exercise Control

by Shearman & Sterling LLP on

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

Court Of Chancery Upholds Waste Claims

by Morris James LLP on

R.A. Feuer v. Redstone, C.A. 12575-CB (April 19, 2018) - This decision involves the rare case where a waste claim is well plead. ...more

Your Daily Dose of Financial News

by Robins Kaplan LLP on

It was a busy Thursday in the big pharma world, with drugmaker Shire rejecting a $60 billion takeover offer from Japan’s Takeda, while US rival Allergan disclosed that it was considering a bid of its own for Shire....more

Southern District Deals Blow to FCPA-Based Securities Class Actions

by Dechert LLP on

When a public company resolves a Foreign Corrupt Practices Act (FCPA) investigation by either the U.S. Department of Justice (DOJ) or Securities and Exchange Commission (SEC), private litigation by investors under the...more

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

Shareholder Litigation in the Wake of the #MeToo Movement

by Morgan Lewis on

Companies are facing a growing number of derivative and securities class actions in the wake of the #MeToo movement. Having strong protocols to address allegations of harassment and sexual misconduct, thoroughly and promptly...more

Nevada Supreme Court Accords Preclusive Effect To Subsequent Federal Court Order

by Allen Matkins on

When bad things happen to corporations, derivative suits are sure to follow. So it was for Galectin Therapeutics, Inc., a Nevada corporation. Following publication of allegations of a "stock promotion scheme", stockholders...more

What Happens When Equal Shares Does Not Mean Equal Power?

In my last blog post, I explored the issue of equal pay among co-equal business partners, and how equal pay disputes can be remedied. In this article, I look at the same issue from a slightly different perspective – whether...more

A Rift in the Space Time Continuum in a FCPA-Related Shareholder Lawsuit

by Thomas Fox on

A rift in the space time continuum is similar to a tear in fabric, thereby creating a disconnect in this timeline. This is certainly what we saw in the district court’s opinion in EMPLOYEES RETIREMENT SYSTEM OF THE CITY OF...more

Court Of Chancery Explains When A Minority Stockholder Has Control

by Morris James LLP on

In re Tesla Motors Inc. Stockholder Litigation, C.A. No. 12711-VCS (Del. Ch. Mar. 28, 2018) - Under Delaware law, a controlling stockholder need not be a majority stockholder. Rather, a controlling stockholder might be a...more

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