News & Analysis as of

Shareholder Litigation Board of Directors Dismissals

Hogan Lovells

Newman v. KKR: Suit dismissed by Delaware Chancery Court for failure to plead demand futility

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In Newman v. KKR, the Delaware Court of Chancery dismissed a shareholder suit against Transphorm, Inc.’s Board and KKR, the largest shareholder, for failure to plead demand futility. The plaintiff alleged that the Board...more

BCLP

High Court dismisses green strategy derivative claim against Shell’s directors

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In February 2023 ClientEarth issued a derivative action against Shell’s 11 directors. ClientEarth alleged that the directors had breached their duties under the Companies Act 2006 (CA 2006) by failing to adopt and implement...more

DarrowEverett LLP

AmeriSource Decision a Difficult Pill to Swallow for Securities Plaintiffs

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The opioid crisis has garnered nationwide attention for decades and has resulted in thousands of lawsuits, subjecting pharmaceutical distributors to billions of dollars in damages. AmerisourceBergen (“Amerisource”) — one of...more

Goodwin

Third Circuit Affirms Dismissal of Complaint, Finding Investors Failed to Sufficiently Allege Amarin’s Statements Were False or...

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On June 14, 2022, the U.S. Court of Appeals for the Third Circuit affirmed the dismissal of a securities suit brought by investors in pharmaceutical company, Amarin Corporation, PLC, holding that the investors had failed to...more

A&O Shearman

M&A Watch: 'Ordinary Course of Business’ During Not-So-Ordinary Times

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On December 8, 2021, the Delaware Supreme Court upheld the Delaware Court of Chancery’s decision that Mirae Asset Financial Group (“Mirae”) was excused from closing a $5.8 billion acquisition of luxury hotels because the...more

Goodwin

Delaware Federal Court Dismisses Shareholder Derivative Suit Concerning Lack of Board Diversity

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Delaware Federal Court Dismisses Shareholder Derivative Suit Concerning Lack of Board Diversity; California Federal Court Dismisses Shareholder Class Action Against Sorrento Therapeutics Regarding COVID-19 Treatment; Delaware...more

Goodwin

Delaware Court of Chancery Dismisses Stockholder Derivative Suit for Failure to Allege Demand Futility

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Delaware Court of Chancery Dismisses Stockholder Derivative Suit for Failure to Allege Demand Futility; Connecticut Jury Finds for Defendant in Crypto Currency Fraud Case; Northern District of Illinois Allows Claims...more

Goodwin

United Food’s “New” Delaware Demand Futility Test: The More Things Change, the More They Stay the Same

Goodwin on

On September 23, 2021, in United Food and Commercial Workers Union v. Zuckerberg et al., the Delaware Supreme Court restated and refined the demand futility test for bringing shareholder derivative claims when it affirmed the...more

Goodwin

Northern District of California Dismisses Shareholder Derivative Suit Concerning Lack of Diversity

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Northern District of California Dismisses Shareholder Derivative Suit Concerning Lack of Diversity; Delaware Court of Chancery Dismisses Stockholder Suit Against Medical Device Company for Failure to Plead Demand Futility;...more

Goodwin

Northern District of California Kicks Shareholder Derivative Suit Against Alphabet, Inc. for Failing to Allege Demand Futility

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Northern District of California Kicks Shareholder Derivative Suit Against Alphabet, Inc. For Failing to Allege Demand Futility; Rare Securities “Holder’s Claim” Trial Results in Jury Verdict for Defendants; Delaware Court of...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

McCarter & English, LLP

The Court Of Chancery Dismisses Derivative Suit Against Truecar Officers And Directors, Finding Plaintiffs Failed To Allege...

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Under Court of Chancery Rule 23.1, a stockholder who wishes to bring a derivative claim on behalf of a corporation must “allege with particularity the efforts, if any, made by the plaintiff to obtain the action the plaintiff...more

A&O Shearman

Delaware Supreme Court Affirms Dismissal Of Derivative Suit Alleging Board Approved Transaction Involving Unnecessary Litigation...

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On January 13, 2020, in an opinion authored by Chief Justice Collins J. Seitz, Jr., the Supreme Court of Delaware affirmed the dismissal by Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery of a stockholder...more

Winstead PC

Court Discusses Claims Against Corporate Board Members And The Business Judgment Rule

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In In re Estate of Poe, the son of a car dealership owner who was frozen out of control of the business by the dying father’s decision to issue new stock sued his father’s estate, trust, and officers of the business. No....more

A&O Shearman

Delaware Court Of Chancery Dismisses Stockholder Challenge To Merger For Failure To Rebut Business Judgment Rule

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On July 25, 2019, Vice Chancellor Kathaleen S. McCormick of the Delaware Court of Chancery dismissed a stockholder suit challenging the $18 billion merger of equals between Towers Watson & Co. and Willis Group Holdings plc,...more

Dechert LLP

Delaware Supreme Court Reverses Dismissal of Caremark Claim, Finding Lack of Board-Level Oversight and Director Independence

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In Marchand v. Barnhill et al. (“Blue Bell”),1 the Delaware Supreme Court on June 19 unanimously reversed the dismissal of a shareholder derivative lawsuit against the members of the board of directors and two officers of...more

A&O Shearman

Reversing A Dismissal, The Delaware Supreme Court Finds The Absence Of Board-Level Monitoring Of "Central Compliance Risks"...

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On June 18, 2019, in a decision authored by Chief Justice Leo E. Strine Jr., the Delaware Supreme Court en banc reversed the dismissal of a stockholder derivative suit against the directors and officers of Blue Bell...more

Skadden, Arps, Slate, Meagher & Flom LLP

Director Independence and Oversight Obligation in Marchand v. Barnhill

On June 18, 2019, in Marchand v. Barnhill, the Delaware Supreme Court, in an opinion written by Chief Justice Leo E. Strine, Jr. on behalf of a unanimous court, issued a decision reversing the Court of Chancery’s dismissal of...more

A&O Shearman

Delaware Court Of Chancery Dismisses Derivative Suit Alleging Tech Company Exposed Itself To Unnecessary Litigation Risk With...

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On April 1, 2019, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery dismissed for lack of demand a stockholder derivative suit against directors of Uber Technologies, Inc. (“Uber”) that asserted breach of...more

A&O Shearman

Delaware Court Of Chancery Applies Corwin To Dismiss Breach Of Fiduciary Duty Claims, Finding Allegations Of A Controlling...

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On March 20, 2019, Chancellor Andre G. Bouchard of the Delaware Court of Chancery dismissed class action claims asserted by former shareholders of NCI, Inc. against its former directors for breach of fiduciary duty in...more

A&O Shearman

Delaware Court Of Chancery Finds Implicit Consent To Jurisdiction By A Foreign Controlling Stockholder In Connection With The...

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On March 15, 2019, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery declined to dismiss a derivative suit brought by minority stockholders of Pilgrim’s Pride Corporation (the “Company”) against the Company’s...more

A&O Shearman

Delaware Court Of Chancery Dismisses Demand-Refused Derivative Litigation, Notwithstanding Allegations Of Board Misrepresentations...

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On November 14, 2018, Chancellor Andre G. Bouchard of the Delaware Court of Chancery granted a motion to dismiss a stockholder derivative suit asserting breach of fiduciary duty claims against certain directors of Richardson...more

A&O Shearman

Finding Disclosures Inadequate To Merit Application Of Corwin, Delaware Supreme Court Reverses Court of Chancery Dismissal Of...

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On July 9, 2018, the Delaware Supreme Court reversed and remanded a decision by the Delaware Court of Chancery to dismiss stockholder class claims for breach of fiduciary duty brought against the former directors of The Fresh...more

A&O Shearman

Reinstating A Post-Closing Merger Challenge, Delaware Supreme Court Holds Views Expressed By Directors In Connection With A...

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On February 20, 2018, the Delaware Supreme Court, in an opinion by Chief Justice Leo E. Strine, Jr., reversed the dismissal of a suit brought by former stockholders of Diamond Resorts International (“Diamond”) challenging the...more

Wilson Sonsini Goodrich & Rosati

Delaware Supreme Court Issues Opinion Affirming the Preclusive Effect of a Prior Dismissal of Derivative Claims on Demand-Futility...

The Delaware Supreme Court recently unanimously affirmed the Delaware Court of Chancery's dismissal of a stockholder derivative claim against directors of Wal-Mart, holding that these claims were precluded because a federal...more

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