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Shareholders Motion to Dismiss Fiduciary Duty

Venable LLP

Chancery Court Dismisses Equitable Challenge to Advance Notice Bylaws as Unripe

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Invoking the recent Delaware Supreme Court decision Kellner v. AIM ImmunoTech Inc., 320 A.3d 239 (Del. 2024) (“Kellner”), the Court of Chancery held that equitable challenges to the enforceability of advance notice bylaws are...more

Morris James LLP

Chancery Finds Sufficiently Pled Fiduciary Duty Claims Relating to De-SPAC Transaction

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Solak v. Mountain Crest Capital LLC, et al., C.A. No. 2023-0469-SG (Del. Ch. Oct. 18, 2024) - The Court of Chancery found that the plaintiff stated legally-sufficient claims in connection with a merger transaction against...more

A&O Shearman

Delaware Supreme Court Holds Business Judgment Rule Applies To Controlled Corporation’s Change Of Corporate Domicile From Delaware...

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On February 4, 2025, the Delaware Supreme Court, on interlocutory appeal, reversed the decision of the Delaware Court of Chancery to deny defendants’ motion to dismiss breach of fiduciary duty claims against directors and a...more

Patton Sullivan Brodehl LLP

Claim for Breach of Fiduciary Duty Might be Subject to the “Internal Affairs Doctrine”

In a prior LLC Jungle post — Think Carefully Before Forming an “Out of State” LLC — we reviewed a published opinion (Boschetti v. Pacific Bay Investments Inc.) holding that a claim for Judicial Dissolution of an LLC was...more

Morris James LLP

Court of Chancery Dismisses Aiding And Abetting Fraud Claim Against Corporate Officers And Directors On Grounds That A Corporation...

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Urvan v. AMMO, Inc., Consol. C.A. No. 2023-0470 PRW (Del. Ch. Feb. 27, 2024, corrected Mar. 14, 2024) - It is an axiom of Delaware law that a corporation acts through its human agents. This principle informs the causes of...more

Jones Day

Court of Chancery Grants Rare Motion to Dismiss Suit Governed by Entire Fairness Standard

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The electric vehicle company Canoo went public in a de-SPAC transaction in December 2020. After its stock price fell, a stockholder in the SPAC who chose not to redeem his stock sued the SPAC board and its controller for...more

Morris James LLP

Delaware Corporate and Commercial Case Law Year in Review - February 2023

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This top ten list summarizes significant decisions of the Delaware Supreme Court and the Delaware Court of Chancery over the past calendar year. Our criteria for selection are that the decision either meaningfully changed...more

King & Spalding

Delaware Chancery Court Holds Corporate Officers Owe Duty of Oversight

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Vice Chancellor Laster Extends This Fiduciary Duty, Previously Recognized only as to Corporate Directors - On January 25, 2023, the Delaware Court of Chancery answered an important question of officer liability, holding...more

Proskauer - Corporate Defense and Disputes

Delaware Chancery Court Denies Dismissal of Challenge to SPAC Merger Disclosures

The Delaware Court of Chancery yesterday denied a motion to dismiss a class action alleging that the directors and sponsor of a special-purpose acquisition company (a “SPAC”) breached their fiduciary duties by disloyally...more

Faegre Drinker Biddle & Reath LLP

Delaware Court of Chancery Applies MFW Analysis to a Nonmerger Transaction and Dismisses Stockholders’ Claims With Prejudice

In City Pension Fund for Firefighters and Police Officers in the City of Miami v. The Trade Desk, Inc., et al., the Delaware Court of Chancery dismissed the plaintiff’s challenge to a transaction that extended the controlling...more

Morris James LLP

Chancery Resolves Section 225 Dispute and Declines to Invalidate Written Consents

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Zhou v. Deng, C.A. No. 2021-0026-JRS (Del. Ch. Apr. 6, 2022) - When deciding a summary proceeding regarding a disputed corporate office under Section 225 of the DGCL, the Court of Chancery may consider whether an election,...more

Cadwalader, Wickersham & Taft LLP

Delaware Chancery Court Signals Heightened Scrutiny of SPAC Boards and Sponsors

The Delaware Chancery Court has issued a decision with major implications for sponsors and directors of Delaware incorporated special purpose acquisition companies (SPACs).  In re MultiPlan Corp. Stockholders Litigation is a...more

Goodwin

Delaware Court of Chancery Declines to Dismiss Investment Firm from Stockholder Derivative Suit

Goodwin on

Delaware Court of Chancery Declines to Dismiss Investment Firm from Stockholder Derivative Suit; Delaware Chancery Court Dismisses Majority of Claims Alleging that California Biotech Firm Profited from Nonpublic Information...more

Morris James LLP

Chancery Declines to Order Production of Privileged Document

Morris James LLP on

Drachman v. BioDelivery Sciences International, Inc., C.A. No. 2019-0728-LWW (Del. Ch. Aug. 25, 2021) - Drachman addresses the attorney-client privilege, certain exceptions thereto, including the Garner doctrine, and...more

Goodwin

Massachusetts Superior Court BLS Finds No Duty To Disclose Alleged Preliminary Merger Discussions

Goodwin on

Massachusetts Superior Court BLS Finds No Duty to Disclose Alleged Preliminary Merger Discussions, Northern District of California Declines to Dismiss Oracle Fraud Class Action Suit, SCOTUS Hears Oral Argument in Goldman...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

Goodwin

Delaware Court of Chancery Denies Motion to Dismiss in Shareholder Class Action Lawsuit Related to Mindbody Inc.'s Billion Dollar...

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Delaware Court of Chancery Denies Motion to Dismiss in Shareholder Class Action Lawsuit Related to Mindbody Inc.’s Billion Dollar Merger with Vista Equity Partners; Second Circuit Unanimously Affirms Lower Court’s Decision...more

Vinson & Elkins LLP

In re Pace Industries, LLC: Minority Shareholder With Bankruptcy Consent Rights Considered Controlling Minority Shareholder With...

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A recent bench ruling in In re Pace Industries, LLC1 by Judge Walrath for the Bankruptcy Court for the District of Delaware (the “Court”) has validated a chapter 11 bankruptcy filing by certain debtors in the jointly...more

Sheppard Mullin Richter & Hampton LLP

Delaware Court of Chancery Addresses Pleading ‘With Particularity’ Under Rule 23.1

Rule 23.1 of the Delaware Court of Chancery Rules requires a plaintiff asserting a shareholder derivative action to plead “with particularity the efforts, if any, made by the plaintiff to obtain the action the plaintiff...more

Dorsey & Whitney LLP

The Importance of Full Disclosure

Dorsey & Whitney LLP on

Directors and officers of corporations owe a duty of care and a duty of loyalty to both the corporation and its shareholders, although the duty of care for directors can be exculpated. A breach of these fiduciary duties can...more

K&L Gates LLP

Chancery Court Allows Claims Due To Manager’s Allegiance To Particular Equity Holders Over The Company

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In Klein and Cambridge Therapeutic Technologies, LLC, v. Wasserman et al., C.A. No. 2017-0643-KSJM (May 29, 2019), the Delaware Court of Chancery addressed claims of breach of fiduciary duties, tortious interference, and...more

Morris James LLP

Chancery Examines Framework of Fiduciary Disclosure Obligations in Soliciting Private Investments

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Clark v. Davenport, C.A. No. 2017-0839-JTL (Del. Ch. July 18, 2019). This opinion decides a motion to dismiss fraud and related tort claims arising out of various investments against a former director and CEO and an...more

K&L Gates LLP

Plaintiff Alleged Facts Sufficient To Support Claims Against Defendants To Survive A Motion To Dismiss

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In Chester County Employees’ Retirement Fund v. KCG Holdings, Inc. et al, C.A. No. 2017-0421-KSJM (Del. Ch. June 21, 2019), the Delaware Court of Chancery denied the defendants’ motion to dismiss claims of breach of fiduciary...more

Farrell Fritz, P.C.

Shareholders Beware: Serve Pre-Litigation Demands or Be Prepared to Plead Demand Futility with Particularity

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In a recent case, Gammel v Immelt (2019 NY Slip Op 32005[U]), shareholders of General Electric Company (GE), brought a derivative shareholder action against the members of GE’s board of directors and various committees...more

Winstead PC

Federal District Court Held That A Shareholder Of A Company Did Not Owe Fiduciary Duties To The Company Regarding A Transfer Of...

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In Liberty Bankers Life Ins. Co. v. Lenhard, a company sued its former chief executive officer and shareholder for breaching fiduciary duties and fraudulent statements regarding an agreement to transfer his stock in the...more

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