News & Analysis as of

Shareholder Litigation

Morris James LLP

Stockholders Lack Derivative Standing to Challenge Transactions Whose Terms Were Set Before They Became Stockholders

Morris James LLP on

In re SmileDirectClub, Inc., 2021 WL 2182827 (Del. Ch. May 28, 2021) - Under the “contemporaneous ownership rule,” to have standing to bring derivative claims, stockholders in a Delaware corporation must own stock at the...more

Proskauer - Corporate Defense and Disputes

CytoDyn Faces Continued Shareholder Pressure

The spate of shareholder actions against biotech companies relating to COVID-19 treatments shows no signs of stopping, and now, derivative lawsuits are following the initial wave of securities class actions. For example,...more

Proskauer - Corporate Defense and Disputes

All-Seeing Bylaws Help Block Diversity Suit

The rash of shareholder derivative actions alleging violations of fiduciary duties tied to companies’ diversity measures are continuing to take a beating in the Northern District of California. We previously posted about the...more

Hogan Lovells

Litigation developments: federal forum provisions

Hogan Lovells on

In this podcast episode, Hogan Lovells partner Ann Kim and counsel Scott Haiber, from our Los Angeles and Baltimore offices respectively, discuss federal forum provisions – and the continued viability of these provisions in...more

Stinson - Corporate & Securities Law Blog

Pre-Closing Dividend Did Not Violate Appraisal Rights Statute

In Re GGP, Inc. Stockholder Litigation arose out of a case where Brookfield Property Partners, L.P. and its affiliates acquired GGP.  The merger agreement provided upon approval of a majority of the GGP stock unaffiliated...more

Hogan Lovells

Litigation developments: fundamental shareholder rights.

Hogan Lovells on

In this podcast episode, New York Hogan Lovells partner Ryan Philp and senior associate Allison Wuertz discuss litigation developments affecting fundamental shareholder rights, including Section 220 books and records demands,...more

Cadwalader, Wickersham & Taft LLP

Corwin Cleansing Denied Again: Delaware Court of Chancery Green Lights Claims Alleging Loyalty Breaches Tainting Company Sales...

On May 6, 2021, Vice Chancellor Zurn of the Delaware Court of Chancery issued a 200-page decision denying a motion to dismiss in In re Pattern Energy Group Inc. Stockholders Litigation, a class action challenging the $6.1...more

Allen Matkins

Court Finds No Cause Of Action Against Officer For Interfering With Shareholder Inspection

Allen Matkins on

William Romanowski is a former NFL linebacker who later became the majority shareholder, director, and "public face" of Nutrition 53, Inc.  When the company's second largest shareholder was allegedly denied inspection of the...more

Allen Matkins

May A Board Give All The Corporate Assets To Charity?

Allen Matkins on

Yesterday, I listed to a talk by Vice Chancellor J. Travis Laster of the Delaware Court of Chancery entitled "Purpose, Power, and Fiduciary Duty: Dimensions of Delaware's Corporate Law Regime".  The webinar was presented by...more

Stinson - Corporate & Securities Law Blog

Votes Compelled by Stockholders Agreement Do Not Count Towards Corwin Cleansing

In connection with an M&A transaction, in In Re Pattern Energy Group Inc. Stockholders Litigation the Delaware Court of Chancery determined that that the plaintiff had stated a claim against the director defendants for breach...more

Stinson - Corporate & Securities Law Blog

Delegating Preparation of Proxy Statement to Management was an Unexculpated Act of Bad Faith

In Re Pattern Energy Group Inc. Stockholders Litigation involved an M&A transaction where the sales process of Pattern Energy Group Inc. was run by an undisputedly disinterested and independent special committee that...more

Bennett Jones LLP

Canadian Government Proposes New CBCA Standard for Electing Directors (Updated)

Bennett Jones LLP on

The federal government has introduced proposed regulations that would, among other things, change the director election process for certain corporations established under the Canada Business Corporations Act (CBCA). The...more

Kramer Levin Naftalis & Frankel LLP

California Federal Court Enforces Delaware Forum Bylaw and Dismisses Derivative Shareholder Suit Including Exchange Act Proxy...

We have discussed in previous alerts a spate of shareholder lawsuits alleging corporate fiduciary breaches and securities law violations tied to the defendant company’s alleged failure to fulfill diversity aspirations. ...more

Proskauer - Corporate Defense and Disputes

Another Diversity Suit Tossed on Forum Selection Grounds

This week, another shareholder derivative suit was dismissed based on a forum selection clause contained in the company’s bylaws. In November 2020, a shareholder filed a derivative action alleging that directors and officers...more

Goodwin

2020 Year In Review Securities Litigation Against Technology Companies

Goodwin on

In many ways, 2020 was an unprecedented year. In midMarch, the United States abruptly went into lockdown as coronavirus cases began to spike; a national emergency was declared, travel bans and gathering restrictions were...more

Carlton Fields

Delaware Courts Secure Limited Scope of “Securities Claims” in D&O Policies

Carlton Fields on

The federal district court in Delaware recently ruled in Calamos Asset Management Inc. v. Travelers Casualty & Surety Company of America that stockholder suits alleging breaches of fiduciary duty in connection with a merger...more

Proskauer - Corporate Defense and Disputes

Pinterest Diversity Suits Multiply

Late last month, a new batch of plaintiffs filed a stockholder derivative suit against Pinterest, Inc., in Delaware Chancery Court, making similar allegations to those made in a pair of cases filed in the Northern District of...more

Allen Matkins

Can An Article Or Bylaw Forum Selection Provision Bind Persons Who Are Not Yet Stockholders?

Allen Matkins on

Today, the Nevada Assembly Judiciary Committee is holding a hearing on SB No. 95, a bill that would make numerous changes to Nevada's business entity statutes.  One change would be to amend NRS 78.046 to authorize the...more

Skadden, Arps, Slate, Meagher & Flom LLP

The Informed Board - Spring 2021

What questions do prospective SPAC directors need to ask? What are the 10 most common misconceptions regarding attorney-client privilege? The Informed Board aims to provide insights into the key issues directors face...more

Skadden, Arps, Slate, Meagher & Flom LLP

Shareholder Suits Demand More Progress on Diversity

In a striking illustration of today’s significant and increasing focus on diversity and inclusion in corporate America, at least 12 public companies recently have been sued by their own shareholders, who accuse directors and...more

Ballard Spahr LLP

Shareholder Derivative Suits – The Next Wave of COVID-19 Litigation?

Ballard Spahr LLP on

The COVID-19 pandemic has led to a variety of claims brought by employees, as well as government enforcement actions. Recently-filed cases are taking a new tack; shareholders are bringing derivative suits and securities...more

Akin Gump Strauss Hauer & Feld LLP

Recent SPAC Shareholder Suits in New York State Courts: The Beginning Wave of SPAC Litigation

Key Points - Between September 2020 and March 2021, at least 35 SPACs have been hit with one or more shareholder lawsuits filed in New York state court. - These lawsuits generally allege that SPAC directors breached...more

Kramer Levin Naftalis & Frankel LLP

Recent SPAC Litigation Focusing on State Law Claims

Most of the recent shareholder litigation that has followed the current wave of Special Purpose Acquisition Company (SPAC) offerings and associated business combinations has been based on federal securities law claims. ...more

Skadden, Arps, Slate, Meagher & Flom LLP

California District Court Dismisses Derivative Suit Against Facebook Board Members and Executives Challenging Alleged Lack of...

On March 19, 2021, the United States District Court for the Northern District of California ordered the dismissal of Natalie Ocegueda v. Zuckerberg, Case No. 20-cv-04444-LB, a shareholder derivative suit purportedly on behalf...more

Troutman Pepper

First Diversity-Driven Derivative Suit in Facebook Case Tossed by Northern District of California

Troutman Pepper on

As Troutman Pepper recently reported, the second half of 2020 brought a new wave of board diversity derivative litigation. These shareholder suits claimed boards of directors of public companies allegedly breached their...more

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Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

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Privacy Officer
JD Supra, LLC
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Sausalito, California 94965

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Updates to This Policy

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