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Shareholders Business Judgment Rule Shareholder Litigation

Davis Wright Tremaine LLP

Delaware Enacts Sweeping Changes to the Delaware General Corporation Law

The Delaware Legislature passed, and Delaware Gov. Matt Meyer signed on March 25, 2025, the landmark Senate Bill 21. Senate Bill 21 amends the Delaware General Corporation Law (the "DGCL") in significant ways, with broad...more

Cadwalader, Wickersham & Taft LLP

In re Oracle Corporation Derivative Litigation: Delaware Supreme Court Affirms Chancery Court Decision Not to Impose Fiduciary...

On January 21, 2025, the Delaware Supreme Court affirmed the Court of Chancery’s decision in In re Oracle Corp. Derivative Lit., finding that a less than 50% stockholder does not owe fiduciary duties absent evidence of either...more

Holland & Knight LLP

Delaware Supreme Court: Permissive Business Judgment Rule Applies to Corporate Conversions

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everal 2024 decisions by the Delaware Court of Chancery led some prominent corporate leaders to express frustration over perceived increased liability standards for corporate officers and directors, even publicly advising new...more

Cooley LLP

Delaware Supreme Court Reverses Chancery Court, Holds Business Judgment Review Applicable to Tripadvisor’s Decision to...

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Delaware corporations contemplating conversion to another state should take note of the Delaware Supreme Court’s recent decision in Maffei, et al. v. Palkon, et al., in which the court ruled that Tripadvisor’s decision to...more

Allen Matkins

Is Pareto Optimality The Answer For Controlling Stockholder Transactions?

Allen Matkins on

Yesterday's post concerned the Delaware Supreme Court's decision that the business judgment rule applied to TripAdvisor's decision to reincorporate in Nevada.  Maffei v. Palkon, 2025 WL 384054 (Del. Feb. 4, 2025).  This...more

Cadwalader, Wickersham & Taft LLP

MFW Framework Inapplicable Where Conflicts Are Not Adequately Disclosed to Stockholders

Following other recent decisions addressing the applicability and scope of Kahn v. M&F Worldwide Corp. (“MFW”), including In re Match Group Inc., Derivative Litigation and Tornetta v. Musk, on May 1, 2024, the Delaware...more

Holland & Knight LLP

Conflictos de interés en Colombia, nueva regulación

Holland & Knight LLP on

En este episodio de "A Lo Legal En Par Minutos", nuestro abogado Edwin Cortés habla con Daniel Fajardo, abogado corporativo, sobre la novedosa regulación en conflictos de interés, en particular la ampliación de la definición...more

Hinshaw & Culbertson LLP

The Business Judgment Rule Saves Disney Officers and Directors in a Stockholder Records Action

Corporate activity related to ESG can have profound legal and market consequences. These consequences can be cut many ways. Although having taken a position on Florida legislation that resulted in negative business...more

Goodwin

Delaware Chancery Court Clears Musk of Breach of Fiduciary Duty Claim

Goodwin on

On April 27, 2022, the Delaware Court of Chancery in In re Tesla Motors Stockholder Litigation rendered a post-trial verdict finding for Elon Musk, co-founder and CEO of Tesla Motors, Inc., on claims that Musk breached his...more

BCLP

Delaware Chancery Court Decision Highlights Risks of Liability for Directors in SPAC Deals

BCLP on

A recent Delaware Chancery Court decision highlights the liability risks faced by directors and sponsors of special purpose acquisition companies (“SPACs”) and the importance of robust disclosure in protecting against those...more

Womble Bond Dickinson

The Business Judgment Rule Cannot Preclude Statutory Inspection Rights

Womble Bond Dickinson on

Where a corporation’s board of directors decided to take a particular course of action that was unpopular with a shareholder, the board could not invoke the business judgment rule to prevent the shareholder’s statutory right...more

Winstead PC

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

Winstead PC on

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

Morris James LLP

Chancery Denies Section 220 Bid for Executive Compensation Records Involving Facebook

Morris James LLP on

Southeastern Pa. Trans. Auth. v. Facebook, Inc., C.A. No. 2019-0228-JRS (Oct. 29, 2019) - Shareholders of a Delaware corporation have a qualified right to access corporate books and records for a “proper purpose.” ...more

Wilson Sonsini Goodrich & Rosati

Delaware Court of Chancery Issues Noteworthy Decision Denying Section 220 Demand and Reinforcing Judicial Deference on Executive...

The Delaware Court of Chancery recently denied two books and records demands made by stockholders of Facebook, Inc. that sought to investigate alleged wrongdoing surrounding Facebook's executive compensation practices at a...more

Orrick, Herrington & Sutcliffe LLP

What's New in Corporate Governance and Securities Law - October 18, 2019

Corporate Governance and Securities Law Developments - Directors Can Be Held Liable for Failure to Oversee “Mission Critical” Regulatory Compliance - On October 1, the Delaware Court of Chancery refused to dismiss a...more

Troutman Pepper Locke

Delaware Recognizes Reality of Merger Negotiations in Upholding Application of Business Judgment Rule

Troutman Pepper Locke on

In In re Towers Watson & Co. Stockholders Litigation, 2019 WL 3334521 (Del. Ch. July 25, 2019), the Delaware Court of Chancery applied the business judgment rule to dismiss a stockholder suit challenging the $18 billion...more

Morris James LLP

Chancery Dismisses Merger Challenge Concerning Board’s Delegation of Merger Negotiations and Management’s Undisclosed Compensation...

Morris James LLP on

In re Towers Watson & Co. Stockholder Litigation, C.A. No. 2018-0132-KSJM (Del. Ch. July 25, 2019). The ultimate responsibility for considering a merger falls on the board to carry out consistent with each directors’...more

Mintz - Securities & Capital Markets...

You’ve Got Mail! Emails May Be Subject to Stockholder Books and Records Requests

Delaware corporations have always been required to provide certain information to their stockholders under Section 220 of the Delaware General Corporation Law (DGCL), but the scope and form of that information has naturally...more

Snell & Wilmer

Director Compensation Update

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The following is an update to an important Delaware case relating to the applicable standard of review for challenged actions involving the setting of director compensation. ...more

A&O Shearman

Delaware Supreme Court Holds That Business Judgment Rule Applies To Controller Transactions As Long As MFW Conditions Are In Place...

A&O Shearman on

On October 9, 2018, the Delaware Supreme Court affirmed a decision of the Delaware Court of Chancery dismissing a lawsuit brought by stockholders of Synutra International Inc. (the “Company”) challenging a controlling...more

Morris James LLP

Delaware Supreme Court Explains the Ab Initio Requirement of MFW

Morris James LLP on

Flood v. Synutra Int’l, Inc., C.A. No. 101, 2018 (Del. Oct. 9, 2018) - Under Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014), commonly referred to as MFW, a controller may gain the benefit of business judgment review...more

A&O Shearman

Delaware Court Of Chancery Applies MFW To Stockholder Challenge To An All-Stock Transaction With Allegedly Controlling...

A&O Shearman on

On July 20, 2018, Vice Chancellor Joseph R. Slights of the Delaware Court of Chancery dismissed a stockholder challenge to an all-stock business combination between Earthstone Energy, Inc. (“Earthstone”) and Bold Energy III...more

Fox Rothschild LLP

“Partial And Elliptical Disclosures” Prevents The Application Of Corwin Business Judgment Review

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In the recent decision of Morrison v. Berry, No. 445, 2017 (Del. July 9, 2018), the Delaware Supreme Court issued an opinion of import in connection with the Corwin doctrine. In Morrison, the High Court reversed a dismissal...more

Morris James LLP

Court Of Chancery Explains When Claim Is Direct And Survives A Merger

Morris James LLP on

In re Straight Path Communications Inc. Consolidated Stockholder Litigation, C.A. No. 2017-0486-SG (Del. Ch. June 25, 2018) - When a merger closes, stockholders of the acquired company generally lose standing to pursue...more

Patterson Belknap Webb & Tyler LLP

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

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