This quarter’s issue includes summaries and associated court opinions of selected cases principally decided between November 2020 and January 2021.
Derivative Litigation -
Second Circuit Reverses Summary Judgment...more
3/8/2021
/ Acquisitions ,
Board of Directors ,
Books & Records ,
Breach of Duty ,
Caremark claim ,
DE Supreme Court ,
Delaware General Corporation Law ,
Derivative Suit ,
Fiduciary Duty ,
Loss Causation ,
Mergers ,
Pleading Standards ,
Ponzi Scheme ,
Proxy Statements ,
PSLRA ,
Shareholder Litigation
More than a decade ago in the seminal case Gantler v. Stephens, the Delaware Supreme Court clarified that officers of Delaware corporations owe the same fiduciary duties of care and loyalty that directors owe to the...more
12/23/2020
/ Board of Directors ,
Books & Records ,
Breach of Duty ,
CEOs ,
Certificates of Incorporation ,
Class Action ,
Corporate Governance ,
Corporate Officers ,
Delaware General Corporation Law ,
Disclosure Requirements ,
Duty of Care ,
Fiduciary Duty ,
Gross Negligence ,
Mergers
The recently published “The Friedman Essay and the True Purpose of the Business Corporation” defends a view of stakeholder governance that reflects the following two basic flaws...more
This quarter’s issue includes summaries and associated court opinions of selected cases principally decided between February and June 2020....more
8/27/2020
/ Arbitration Agreements ,
Best Interest Standard ,
Board of Directors ,
Bylaws ,
Corporate Counsel ,
Corwin Doctrine ,
Derivative Suit ,
Fiduciary Duty ,
Forum Selection ,
Investment Advisers Act of 1940 ,
Judicial Notice ,
Loss Causation ,
Material Misstatements ,
Mergers ,
MFW ,
Omissions ,
Pleading Standards ,
PLSRA ,
Scienter ,
Securities Fraud ,
Securities Litigation ,
Settlement ,
Short-Swing Trading ,
Summary Judgment
Directors of most for-profit U.S. corporations have long considered the corporation’s relationships with customers, employees, suppliers and the communities in which they operate — sometimes referred to as “stakeholders” — in...more
8/7/2020
/ Board of Directors ,
Business Judgment Rule ,
Coronavirus/COVID-19 ,
Corporate Governance ,
Directors ,
Environmental Social & Governance (ESG) ,
Fiduciary Duty ,
Human Rights ,
Oversight Duties ,
Shareholders ,
Stakeholder Engagement
On June 23, 2020, the Delaware General Assembly adopted amendments to the Delaware General Corporation Law (DGCL) proposed by the Delaware State Bar Association, including provisions confirming certain powers that a board of...more
Skadden partner Edward Micheletti, who heads the litigation practice of the firm’s Wilmington office, answers common Delaware law questions facing boards of directors during the COVID-19 crisis....more
5/12/2020
/ Acquisitions ,
Board of Directors ,
Business Closures ,
Buyers ,
Coronavirus/COVID-19 ,
Delaware General Corporation Law ,
Government Shutdown ,
Material Adverse Change Clauses (MACs) ,
Material Adverse Effects ,
Mergers ,
Oversight Duties ,
Publicly-Traded Companies ,
Section 220 Request ,
Sellers ,
Shareholder Litigation ,
Shareholders ,
Workplace Safety
On April 6, 2020, the governor of Delaware, John Carney, issued an executive order addressing the notice requirement for public companies that switch their stockholders’ meetings from a physical location to a “virtual”...more
4/8/2020
/ Board of Directors ,
Coronavirus/COVID-19 ,
Corporate Counsel ,
Executive Orders ,
Filing Requirements ,
Governor Carney ,
Notice Requirements ,
Public Health Emergency ,
Publicly-Traded Companies ,
Reporting Requirements ,
Securities and Exchange Commission (SEC) ,
Shareholder Meetings ,
Shareholders ,
Virtual Meetings ,
Websites
On February 26, 2020, Skadden held a webinar titled “Reevaluating the Board Risk Oversight Process: Implications of Marchand and Other Recent Developments.” The panelists were Edward Micheletti, litigation partner and...more
3/25/2020
/ Board of Directors ,
Books & Records ,
Corporate Officers ,
DE Supreme Court ,
Duty of Loyalty ,
Fiduciary Duty ,
GAAP ,
Non-GAAP Financial Measures ,
Oversight Duties ,
Personal Liability ,
Risk Assessment ,
Risk Management ,
Securities and Exchange Commission (SEC) ,
Shareholder Litigation
The question is no longer whether the volatility created by the COVID-19 pandemic will deepen the difficulties businesses and other institutions face in the coming months, but by how much and in what ways. In the past few...more
3/21/2020
/ Acquisitions ,
Antitrust Provisions ,
Audits ,
Board of Directors ,
Coronavirus/COVID-19 ,
Corporate Restructuring ,
Corporate Taxes ,
Court Closures ,
Debt-Equity ,
Energy Projects ,
Families First Coronavirus Response Act (FFCRA) ,
IRS ,
Liquidity ,
Mergers ,
Power Infrastructure ,
Securities Litigation ,
Shareholder Activism ,
Shareholder Meetings ,
Stock Repurchases
The dawn of a new decade brings with it the certainty of ongoing challenges to the conduct of public company directors based on alleged breaches of fiduciary duty.
This note is a brief reminder for directors of Delaware...more
Despite political and economic uncertainties, markets and deal activity were resilient in 2019, and strong fundamentals remain in place heading into 2020. Companies continue to face a challenging litigation and enforcement...more
1/30/2020
/ Acquisitions ,
Administrative Procedure Act ,
Anti-Discrimination Policies ,
Anti-Harassment Policies ,
Anti-Kickback Statute ,
Antitrust Investigations ,
Appeals ,
Arbitration Awards ,
Attorney General ,
Backstop Agreements ,
BEPS ,
BitLicense ,
Blockchain ,
Board of Directors ,
Bonds ,
Capital Markets ,
CFIUS ,
CFTC ,
Chapter 11 ,
Claim Preclusion ,
Class Action ,
Commercial Bankruptcy ,
Common Stock ,
Congressional Investigations & Hearings ,
Congressional Subpoenas ,
Consumer Financial Protection Bureau (CFPB) ,
Cooperation Agreement ,
Copyright ,
Corporate Governance ,
Corporate Restructuring ,
Corporate Social Responsibility ,
Corporate Taxes ,
Corwin Doctrine ,
Covenant Lite Deals ,
Creditors ,
Cross-Border Transactions ,
DACA ,
DE Supreme Court ,
Debt Financing ,
Debtors ,
Department of Justice (DOJ) ,
Dischargeable Debts ,
Disgorgement ,
Disparate Impact ,
Dodd-Frank ,
Down Rounds ,
Drug Pricing ,
EBITDA ,
Employee Retirement Income Security Act (ERISA) ,
Employer Liability Issues ,
Employment Discrimination ,
Enforcement Actions ,
Enforcement of Foreign Judgments ,
Enterprise Act 2002 ,
Environmental Social & Governance (ESG) ,
EU ,
Fair Housing Act (FHA) ,
Federal Trade Commission (FTC) ,
FinTech ,
FIRRMA ,
Foreign Acquisitions ,
Foreign Investment ,
Foreign Issuers ,
FRCP 23 ,
General Data Protection Regulation (GDPR) ,
General Elections ,
GILTI tax ,
High-Yield Markets ,
Hong Kong ,
Hong Kong Stock Exchange ,
Individual Accountability ,
Initial Public Offering (IPO) ,
Intellectual Property Litigation ,
Intercreditor Agreements ,
International Arbitration ,
International Litigation ,
IRS ,
Issue Preclusion ,
Japan ,
Joint Venture ,
Legislative Agendas ,
Life Sciences ,
Listing Rules ,
Litigation Strategies ,
Make-Whole Premium ,
Mergers ,
MFW ,
Multinationals ,
National Security ,
PCAOB ,
Pharmaceutical Industry ,
Political Parties ,
Preferred Shares ,
Private Offerings ,
Privately Held Corporations ,
Proxy Advisory Firms ,
Publicly-Traded Companies ,
Refinancing ,
Regulatory Agenda ,
Reporting Requirements ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Separation of Powers ,
Shareholder Activism ,
Shareholder Proposals ,
Shareholders ,
Split of Authority ,
State Labor Laws ,
Stock Drop Litigation ,
Tax Cuts and Jobs Act ,
Tax Litigation ,
Technology Sector ,
Third-Party Release Agrements ,
Transparency ,
UK ,
UK Brexit ,
Valuation ,
White Collar Crimes
Consistent with trends in recent years, in 2019 Delaware corporation law largely was shaped by post-closing suits for money damages against directors who had approved mergers and acquisitions. Two Delaware Supreme Court...more
1/24/2020
/ Acquisitions ,
Board of Directors ,
Books & Records ,
Breach of Duty ,
Business Judgment Rule ,
Caremark claim ,
Conflicts of Interest ,
Controlling Stockholders ,
Corporate Counsel ,
Corwin Doctrine ,
Damages ,
DE Supreme Court ,
Delaware General Corporation Law ,
Derivative Suit ,
Discovery ,
Electronically Stored Information ,
Fiduciary Duty ,
Independent Director ,
Inspection Rights ,
Litigation Strategies ,
Mergers ,
MFW ,
Motion to Dismiss ,
Oversight Duties ,
Section 220 Request ,
Shareholder Litigation ,
Shareholder Votes ,
Void ab initio
Recently, the frequency of stockholder demands to inspect corporate books and records pursuant to Section 220 of the Delaware General Corporation Law has increased. In turn, the case law concerning Section 220 demands is...more
1/21/2020
/ Activist Investors ,
Appeals ,
Board of Directors ,
Books & Records ,
Breach of Duty ,
Confidential Documents ,
Corporate Counsel ,
DE Supreme Court ,
Delaware General Corporation Law ,
Discovery ,
Document Productions ,
Electronically Stored Information ,
Email ,
Fiduciary Duty ,
Litigation Strategies ,
Mergers ,
Proxy Contests ,
Scope of Discovery Requests ,
Section 220 Request ,
Shareholder Litigation ,
Shareholders
This issue focuses on important, developing areas of Delaware corporation law and deal litigation, including recent trends in Delaware corporate disclosure law, the Delaware Supreme Court’s important ruling in Marchand v....more
11/20/2019
/ Acquisitions ,
Appraisal Rights ,
Attorney-Client Privilege ,
Board of Directors ,
Compliance ,
Conflicts of Interest ,
Controlling Stockholders ,
Corporate Executives ,
Corporate Officers ,
Corwin Doctrine ,
DE Supreme Court ,
Deal Price ,
Delaware General Corporation Law ,
Directors ,
Disclosure Requirements ,
Entire Fairness Standard ,
Fair Valuation ,
Fiduciary Duty ,
Financial Adviser ,
Good Faith ,
Market Price ,
Material Misstatements ,
Mergers ,
MFW ,
Mootness Fee Applications ,
Omissions ,
Oversight Committee ,
Oversight Duties ,
Preliminary Injunctions ,
Publicly-Traded Companies ,
Risk Assessment ,
Risk Management ,
Shareholder Votes
On October 30, 2019, the Delaware Court of Chancery struck a major blow against the plaintiffs’ bar’s efforts to lower the statutory hurdle to maintaining stockholder derivative claims. A stockholder of Ultragenyx...more
11/4/2019
/ Board of Directors ,
Business Judgment Rule ,
Compensation & Benefits ,
Controlling Stockholders ,
Corporate Counsel ,
Delaware General Corporation Law ,
Derivative Suit ,
Dismissals ,
Executive Compensation ,
Pharmaceutical Industry ,
Pre-Suit Notice ,
Shareholder Demands
This quarter’s issue includes summaries and associated court opinions of selected cases principally decided between May and August 2019....more
10/2/2019
/ Acquisitions ,
Appraisal Rights ,
Board of Directors ,
Books & Records ,
Breach of Duty ,
Class Action ,
Corwin Doctrine ,
DE Supreme Court ,
Deal Price ,
Disclosure Requirements ,
Enforcement Actions ,
Excessive Fees ,
Fair Value Standard ,
Fiduciary Duty ,
Forfeiture ,
Guilty Pleas ,
Insider Trading ,
Investment Adviser ,
Jury Verdicts ,
Market Manipulation ,
Materiality ,
Mergers ,
Misrepresentation ,
Motion for Summary Judgment ,
Motion to Dismiss ,
Offering Documents ,
Omissions ,
Pleading Standards ,
Popular ,
Scienter ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
Securities Litigation ,
Shareholder Litigation ,
SLUSA ,
Standing
There is an ongoing debate regarding the role of publicly traded for-profit business corporations in addressing the many serious challenges confronting society, including some directly involving nonshareholder corporate...more
The Delaware Supreme Court’s 2015 decision in Corwin v. KKR Financial Holdings LLC1 fashioned a powerful defense in post-closing money damages cases for boards of directors by finding that business judgment deference applies...more
5/13/2019
/ Acquisitions ,
Appeals ,
Board of Directors ,
Business Judgment Rule ,
Conflicts of Interest ,
Controlling Stockholders ,
Corwin Doctrine ,
Damages ,
DE Supreme Court ,
Defense Strategies ,
Disclosure Requirements ,
Disclosure Settlement ,
Disinterested Parties ,
Dismissals ,
Failure To Disclose ,
Injunctive Relief ,
Litigation Strategies ,
Material Misstatements ,
Merger Agreements ,
Mergers ,
Motion to Dismiss ,
Omissions ,
Pleadings ,
Pre-Closing Issues ,
Reaffirmation ,
Reversal ,
Section 220 Request ,
Shareholder Votes
On January 29, 2019, the Delaware Supreme Court provided guidance to the Court of Chancery regarding the scope of a stockholder’s inspection rights under Section 220 of the Delaware General Corporation Law or similar LLC or...more
2/7/2019
/ Abuse of Discretion ,
Appeals ,
Board of Directors ,
Books & Records ,
Corporate Counsel ,
Corporate Misconduct ,
DE Supreme Court ,
Directors ,
Document Productions ,
Electronic Communications ,
Electronically Stored Information ,
Email ,
Email Policies ,
Inspection Rights ,
Mobile Devices ,
Reversal ,
Section 220 Request ,
Shareholder Rights
There is an ongoing debate about the role that publicly traded for-profit business corporations should play in addressing a broad range of problems confronting our world today. Many issues fall under the ESG label — meaning...more
Over the last few years, significant developments in Delaware law and practice have changed the traditional M&A litigation landscape. These developments resulted in a dramatic reduction in pre-closing applications for...more
11/30/2018
/ Acquisitions ,
Aiding and Abetting ,
Appraisal ,
Appraisal Rights ,
Board of Directors ,
Breach of Duty ,
Conflicts of Interest ,
Damages ,
Deal Price ,
Defense Strategies ,
Delaware General Corporation Law ,
Discovery ,
Fair Valuation ,
Fiduciary Duty ,
Financial Adviser ,
Investment Banks ,
Litigation Strategies ,
Mergers ,
Motion to Compel ,
Pleading Standards ,
Popular ,
Remedies ,
Scienter ,
Shareholders ,
Subpoenas
Several recent decisions applying Delaware law offer helpful insight about the impact that activist investor involvement has on board decision-making leading to a transaction and how those decisions will be reviewed by the...more
11/22/2017
/ Board of Directors ,
Corporate Governance ,
Corwin Doctrine ,
Delaware General Corporation Law ,
Duty of Care ,
Duty of Loyalty ,
Duty to Disclose ,
Fiduciary Duty ,
Jurisdiction ,
Mergers ,
Morrison v National Australia Bank ,
Pleading Standards ,
Proxy Contests ,
Shareholder Activism ,
Shareholder Litigation ,
Shareholders ,
Standard of Review ,
Totality of Circumstances Test ,
TRO
This quarter’s issue includes summaries and associated court opinions of selected cases principally decided between February 2017 and April 2017. The cases address developing trends in class actions, ERISA, fiduciary duties,...more
6/9/2017
/ Acquisitions ,
Bad Faith ,
Board of Directors ,
Breach of Duty ,
Class Action ,
Class Certification ,
Dismissals ,
Dodd-Frank ,
Duty of Loyalty ,
Duty of Prudence ,
Employee Retirement Income Security Act (ERISA) ,
Enforcement Actions ,
ESOP ,
Ethics Breach ,
Excessive Fees ,
Food Manufacturers ,
Initial Public Offering (IPO) ,
Mergers ,
Misrepresentation ,
Pleading Standards ,
PLSRA ,
Regulation D ,
Rule 10b-5 ,
Rule 11 ,
Sanctions ,
Scienter ,
Securities ,
Securities Exchange Act ,
Securities Fraud ,
Securities Litigation ,
Securities Violations ,
Whistleblowers
What is the most significant recent development in Delaware, from a litigation standpoint?
The most significant recent development impacting deal litigation in Delaware is the continuing evolution of the Corwin doctrine,...more
5/8/2017
/ Appraisal Rights ,
Board of Directors ,
Books & Records ,
Breach of Duty ,
Business Judgment Rule ,
Corwin Doctrine ,
DE Supreme Court ,
Delaware General Corporation Law ,
Exclusive Forum ,
Fiduciary Duty ,
Independent Director ,
Irrebuttable Presumptions ,
Mergers ,
Multidistrict Litigation ,
Section 220 Request ,
Shareholder Litigation ,
Shareholders ,
Standard of Review ,
Trulia