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Shareholders Motion to Dismiss Shareholder Litigation

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

Sheppard Mullin Richter & Hampton LLP

Fourth Circuit Rejects the Use of Short-Seller Report as a Basis for Satisfying Loss Causation Element in Securities Fraud Action

The United States Court of Appeals for the Fourth Circuit recently joined a growing consensus among federal appellate courts: short-seller reports, without more, rarely suffice to plead loss causation under the federal...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

Morris James LLP

Chancery Finds that the Plaintiff Successfully Pled Breach of Contract for Milestone Payments

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Medal v. Beckett Collectibles, LLC, C.A. No. 2023-0984-VLM (Del. Ch. Aug. 22, 2024). In denying a motion to dismiss, the Court of Chancery held that the plaintiff pled reasonably conceivable claims for breach of...more

Woodruff Sawyer

Securities Motion to Dismiss Trends (Part 2): The Southern District of New York

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Last year, just three federal district courts handled half of all securities class actions. In the second part of his three-part series, my partner and securities litigator Walker Newell reviews motion to dismiss trends in...more

A&O Shearman

District Of Arizona Grants Motion To Dismiss Shareholder Derivative Suit Against Residential Property Dealer In Connection With...

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On August 14, 2024, Judge Michael T. Liburdi of the United States District Court for the District of Arizona granted with leave to amend a motion to dismiss a shareholder derivative suit brought in the name of the company, a...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

Ballard Spahr LLP

Mum’s the Word: Pegasystems Reminds Companies to Think Hard Before Denigrating Pending Claims

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Summary - A recent ruling on a motion to dismiss in a shareholder putative class action, brought by an investor against software company Pegasystems (Pega) in the District of Massachusetts, should give legal leaders and...more

Jones Day

Recent Developments in Shareholder Derivative Litigation Concerning Diversity in Corporate Leadership

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The Situation: A number of shareholder derivative lawsuits in federal court have been filed seeking to hold directors and officers of major companies accountable for alleged failures to uphold their companies' stated...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

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

Morris James LLP

In a Books and Records Action, Court Critiques Defendant’s Motion to Dismiss, and Declines to Order Inspection of Documents Not...

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Paraflon Investments, Ltd. v. Linkable Networks, Inc., C.A. No. 2017-0611-JRS (Del. Ch. Apr. 3, 2020). Sometimes it bears repeating that Section 220 actions are intended to be summary proceedings to evaluate a...more

Farrell Fritz, P.C.

Resignation: Antidote for Internal Dissention and Deadlock?

Farrell Fritz, P.C. on

There are countless New York corporations in which the owners are equal 50/50 shareholders and co-members of a two-member board. Where one sues the other for judicial dissolution, and the ground for dissolution is “deadlock”...more

Farrell Fritz, P.C.

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

Farrell Fritz, P.C. on

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

Farrell Fritz, P.C.

Dismissed: The Tragic, True Story of Direct and Derivative Claims Jumbled Together Beyond Recognition

Farrell Fritz, P.C. on

Much has been written about the pleading requirements unique to shareholder derivative lawsuits. For example, a derivative complaint must allege the plaintiff’s standing as a shareholder at all relevant times. Demand upon the...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...

Winstead PC on

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

Farrell Fritz, P.C.

Dead Men Tell No Tales of Shareholder Buy-Outs Gone Sour

Farrell Fritz, P.C. on

When three gentlemen in their mid-eighties, one of whom is in a nursing home with failing health and onset dementia, are the key players in a disputed shareholder buy-out transaction, what are the odds they’ll all be around...more

Morris James LLP

Court Of Chancery Explains Standing To Bring Fiduciary Duty Claims After Being Forced to Sell Stock

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This is an important decision because it clarifies when a stockholder loses standing to bring a fiduciary duty case because he sold his stock. Briefly, breach of fiduciary duty claims may be direct (belonging to the...more

Morris James LLP

Court of Chancery Again Explains Claim Against An Investment Banker

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In this unusual factual circumstance, the Court denied a motion to dismiss a claim against an investment banker for aiding and abetting a board’s alleged breach of its duty to act with care. Note that the board itself was...more

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