News & Analysis as of

Shareholder Litigation

Wilson Sonsini Goodrich & Rosati

Delaware Court of Chancery Interprets New Section 144 and Applies Heightened Presumption of Director Independence

On June 15, 2026, the Delaware Court of Chancery issued an Opinion interpreting Section 144 of the Delaware General Corporation Law (the DGCL), the landmark statutory measure adopted last year to provide safe harbors for...more

Vinson & Elkins LLP

Supreme Court Holds Investment Company Act Section 47(b) Does Not Create a Private Right of Action

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On June 11, 2026, the Supreme Court issued its opinion in FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd., No. 24-345, 608 U.S. ___ (2026) (“Saba Capital”)....more

Proskauer - Regulatory & Compliance

Supreme Court Holds That Section 47(b) of the Investment Company Act Does Not Create a Private Right of Action

On June 11, 2026, the United States Supreme Court issued its decision in FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd., holding that Section 47(b) of the Investment Company Act of 1940, as amended (the “1940...more

Ballard Spahr LLP

SpaceX Becomes the First Major IPO Issuer to Implement the SEC’s New Shareholder Arbitration Policy

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Based on reports published around the IPO and the first day of trading, the SpaceX offering appears to have set or approached a remarkable number of records. Some are clear-cut “firsts,” while others are more accurately...more

Morgan Lewis

Supreme Court Rejects Implied Private Right of Action Under ICA Section 47(b)

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The US Supreme Court’s landmark decision in FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd., which resolves a split among several federal circuit courts, reduces litigation risk for investment companies under...more

K&L Gates LLP

United States: Supreme Court Scissors up Saba’s Rescission Argument Under Section 47(b) of the 1940 Act

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The Supreme Court agreed to hear FS Credit Opportunities Corp., et al. v. Saba Capital Master fund, et al. to resolve whether Section 47(b) of the Investment Company Act of 1940 (Act) allows private parties to bring lawsuits...more

Stark & Stark

Muellenberg v. Bikon Corp.: The Landmark New Jersey Minority Oppression Case Every Closely Held Business Owner Should Understand

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Few New Jersey cases have had a greater impact on minority shareholder oppression law than the New Jersey Supreme Court’s decision in Muellenberg v. Bikon Corp., 143 N.J. 168 (1996). The case is one of the foundational...more

Jones Day

Shareholder Proposal Litigation Increases Following the SEC's Revised Rule 14a-8 Process (UPDATED)

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Since the SEC stopped substantively responding to Rule 14a-8 no-action requests, shareholders are increasingly turning to litigation to challenge the exclusion of their proposals from company proxy materials. Once...more

Pietragallo Gordon Alfano Bosick & Raspanti,...

Founder Disputes: Key Considerations When Founders Clash

Many fast-growing companies are founded by friends, family, or colleagues. As these companies expand, founder disputes can emerge. Founder disputes are not typical business disagreements. Founders often play many roles...more

Cooley LLP

Proxy Season Recap: Shareholder Proposal Exclusions & Litigation

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Here’s an excerpt from this Cooley Alert penned by Beth Sasfai, Brad Goldberg, Michael Mencher, Vince Flynn, Victoria Peluso, Reid Hooper and Justin Kisner: “As of June 1st, companies had submitted 170 Rule 14a-8(j) exclusion...more

A&O Shearman

Delaware Supreme Court Confirms Proxy Dissemination Starts Laches Clock For Disclosure Claims

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On May 7, 2026, the Delaware Supreme Court affirmed the dismissal of stockholder claims challenging a de-SPAC transaction, holding that claims filed more than three years after the allegedly misleading proxy was disseminated...more

A&O Shearman

Court Of Chancery Imposes Sanctions For Spoliation Of Signal Messages

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On May 26, 2026, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery imposed sanctions for the spoliation of evidence in a fiduciary duty case arising from the merger of a wrestling entertainment company (the...more

A&O Shearman

Delaware Supreme Court Affirms Dismissal Of As-Applied Equitable Challenges To Advance Notice Bylaws As Unripe

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On April 29, 2026, the Delaware Supreme Court, sitting en banc, affirmed a pair of decisions by the Delaware Court of Chancery dismissing stockholder complaints seeking to assert as-applied equitable challenges to the...more

A&O Shearman

Northern District Of California Denies Class Certification, Holding Defendants Rebutted Basic Presumption Of Reliance

A&O Shearman on

On April 21, 2026, Judge Susan Illston of the United States District Court for the Northern District of California denied class certification in a putative class action brought under the Securities Exchange Act of 1934 (the...more

Foley & Lardner LLP

Guilbeau v. Footprint Int’l Holdco, Inc.: Lessons From a Chancery Court Cramdown Financing Decision and Insights Into DGCL Section...

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In Guilbeau v. Footprint International Holdco, Inc., Vice Chancellor Laster considered fiduciary-duty challenges to a dilutive cramdown financing, including claims against an alleged non-majority controller and members of the...more

Freeman Law

Corporate Migrations | They’re Choosin’ Texas and We Can Tell

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For generations, Delaware served as the default home for corporate charters, thanks in part to its specialized Court of Chancery and a deep body of case law, leading to more predictable judicial outcomes....more

K&L Gates LLP

Delaware Delivers Another “Bump-Up Exclusion” Win to D&O Policyholders

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Earlier this year, the Delaware Supreme Court delivered the latest win for policyholders in a string of battles regarding so-called “Bump-Up Exclusions” in directors and officers (D&O) liability insurance policies. The ruling...more

Eversheds Sutherland (US) LLP

Georgia’s corporate governance reform: Key changes under HB 1185

On May 11, 2026, Governor Brian Kemp signed into law House Bill 1185, enacting sweeping corporate governance reforms of Titles 14 and 15 of the Georgia Code that go into effect on July 1, 2026. The legislation makes the most...more

Fried Frank

Chancery Holds Funds Aided and Abetted Portco Directors’ Fiduciary Breaches in Preferred Stock Financing Offered to All...

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In Guilbeau v. Footprint (May 11, 2026), the Court of Chancery held, at the pleading stage of litigation, that it was reasonable to infer that certain directors of Footprint International Holdco, Inc., a non-controlled...more

Farrell Fritz, P.C.

When Stockholders Come Knocking: Defending Against Section 220 Demands in Delaware

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If you’re on the management team of a Delaware corporation or serve as general counsel to one, it’s only a matter of time before a stockholder shows up with a books and records demand under Section 220 of the Delaware General...more

Goodwin

Southern District of New York Dismisses Fraud Claims Against Auditor Related to de-SPAC Transaction

Goodwin on

On March 17, 2026, the US District Court for the Southern District of New York dismissed an action brought against Ernst & Young by shareholders of Brooge Petroleum and Gas Investment Company FZE....more

K&L Gates LLP

United States: The SEC Finally Admits It, The No-Admit/No-Deny Policy Is Gone

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On 18 May 2026, the United States Securities and Exchange Commission (SEC) rescinded the rule barring settling defendants from publicly denying the agency’s allegations. The policy, in place since 1972, effectively silenced...more

King & Spalding

Georgia Modernizes Corporate Code: Key Updates to Business Court Access and Shareholder Disputes

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Georgia has enacted HB 1185, which updates the corporate governance and litigation framework applicable to Georgia companies. The legislation is effective July 1, 2026, and applies to claims or proceedings initiated on or...more

Vinson & Elkins LLP

Delaware Court of Chancery Upholds Removal of “Imperious” CEO Under DGCL Section 225

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On April 20, 2026, Vice Chancellor J. Travis Laster issued a post-trial opinion in DSM HoldCo, Inc. v. Demoulas, C.A. No. 2025-1020-JTL (Del. Ch. Apr. 20, 2026), an action brought under 8 Del. C. § 225(a) by the parent...more

Alston & Bird

Georgia Enacts Landmark Reforms to Corporate Governance and Shareholder Litigation Law

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Our Securities Litigation and Securities groups review Georgia’s enactment of HB 1185, a major update to the state’s corporate governance and shareholder litigation frameworks. Effective July 1, 2026, the law tightens...more

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