In Anderson v. Magellan Health, Inc., No. 2021-0202, — A.3d —-, 2023 WL 4364524 (Del. Ch. July 6, 2023) (McCormick, C.), the Delaware Court of Chancery addressed the circumstances under which the Court will award a...more
7/18/2023
/ Acquisitions ,
Attorney's Fees ,
Board of Directors ,
Breach of Duty ,
Business Litigation ,
Corporate Governance ,
Delaware ,
Disclosure ,
Fiduciary Duty ,
Injunctive Relief ,
Mergers ,
Proxy Statements ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Shareholder Litigation ,
Shareholders
In United Food & Commercial Workers Union & Participating Food Industry Employers Tri-State Pension Fund v. Zuckerberg, No. 404, 2020, — A.3d –, 2021 WL 3433261 (Del. Sept. 23, 2021), the Delaware Supreme Court adopted a new...more
In Manti Holdings, LLC v. Authentix Acquisition Co., Inc., No. 354, 2020, 2021 WL 4165159 (Del. Sept. 13, 2021), the Delaware Supreme Court issued an important opinion affirming the use of stockholders agreements by and among...more
In Coster v. UIP Companies, Inc., No. 49-2020, 2021 WL 2644094 (Del. June 28, 2021), the Delaware Supreme Court reversed a Court of Chancery ruling, No. 2018-0440-KSJM, 2020 WL 429906 (Del. Ch. Jan. 28, 2020) (McCormick,...more
In Juul Labs, Inc. v. Grove, 2020 Del. Ch. LEXIS 264 (Del. Ch. Aug. 13, 2020) (Laster, V.C.), the Delaware Court of Chancery held that the “internal affairs doctrine” bars a stockholder of a Delaware corporation headquartered...more
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
5/14/2020
/ Board of Directors ,
Breach of Duty ,
Burden of Proof ,
Demand Futility ,
Derivative Suit ,
Fiduciary Duty ,
Local Rules ,
Motion to Dismiss ,
Pleading Standards ,
Pleadings ,
Quid Pro Quo ,
Rules of Civil Procedure ,
Section 220 Request ,
Shareholder Litigation ,
Shareholders
In Jensen v. iShares Trust, 2020 Cal. App. LEXIS 61 (Cal. App. Jan. 23, 2020), a rare state court decision addressing claims under the Securities Act of 1933 (“1933 Act”), the California Court of Appeal rejected...more
2/4/2020
/ Appeals ,
Asset Tracing ,
BlackRock ,
Broker-Dealer ,
ETFs ,
Failure To Disclose ,
Institutional Investors ,
Investment Company Act of 1940 ,
Registration Statement ,
Secondary Markets ,
Securities Act of 1933 ,
Securities Exchange Act ,
Shareholder Litigation ,
Shareholders ,
Standing
In Marchand v. Barnhill, No. 533, 2018, 2019 Del. LEXIS 310 (Del. June 18, 2019), the Delaware Supreme Court (Strine, C.J.) reversed a Delaware Court of Chancery (Slights, V.C.) order dismissing a derivative claim alleging...more
7/30/2019
/ Bad Faith ,
Blue Bell Creameries ,
Board of Directors ,
Breach of Duty ,
Caremark claim ,
DE Supreme Court ,
Derivative Suit ,
Duty of Loyalty ,
Food and Drug Administration (FDA) ,
Food Manufacturers ,
Food Safety ,
Listeria ,
Shareholder Litigation
UPDATE: On August 5, 2020, the Delaware Supreme Court summarily affirmed the judgment of the Court of Chancery “on the basis of and for the reasons stated in its January 25, 2019 opinion.”
Section 220 of the Delaware...more
2/1/2019
/ Books & Records ,
Burden of Production ,
Delaware General Corporation Law ,
Electronic Communications ,
Electronically Stored Information ,
Email ,
Investigations ,
Recordkeeping Requirements ,
Section 220 Request ,
Shareholder Litigation ,
Shareholders
In Flood v. Synutra Int’l, Inc., No. 101, 2018, 2018 Del. LEXIS 460 (Del. Oct. 9, 2018), the Delaware Supreme Court (Strine, C.J.) held that a controlling stockholder who pursues a merger with the controlled company will have...more
10/18/2018
/ Aiding and Abetting ,
Breach of Duty ,
Bright-Line Rule ,
Business Judgment Rule ,
Buyouts ,
Class Action ,
Controlling Stockholders ,
DE Supreme Court ,
Due Care ,
Duty of Care ,
Fiduciary Duty ,
Mergers ,
Minority Shareholders ,
Motion to Dismiss ,
Shareholder Litigation
In Bushansky v. Soon-Shiong, 2018 Cal. App. LEXIS 493 (Cal. App. May 25, 2018), the California Court of Appeal, Fourth Appellate District, affirmed the dismissal of a shareholder derivative action brought in the Superior...more
In In re Investors Bancorp, Inc. Stockholder Litigation, No. 169, 2017, 2017 WL 6374741 (Del. Dec. 13, 2017), the Delaware Supreme Court limited the ability of directors to assert the stockholder ratification defense when...more
1/4/2018
/ Board of Directors ,
Business Judgment Rule ,
DE Supreme Court ,
Entire Fairness Standard ,
Equity Plans ,
Fiduciary Duty ,
Ratification ,
Self-Dealing ,
Shareholder Approval ,
Shareholder Litigation ,
Shareholders
In Parametric Sound Corp. v. The Eighth Judicial District Court of the State of Nevada, ___ P.3d ___, 2017 WL 4078845 (Nev. Sept. 14, 2017), the Nevada Supreme Court addressed the circumstances under which breach of fiduciary...more
In a shareholder derivative action, to survive a motion to dismiss for failure to plead facts showing demand futility, a derivative plaintiff must plead particularized facts showing either actual involvement by a majority of...more
7/17/2017
/ Board of Directors ,
Breach of Duty ,
Bribery ,
Demand Futility ,
Derivative Suit ,
Fiduciary Duty ,
Foreign Corrupt Practices Act (FCPA) ,
Foreign Official ,
Illegal Conduct ,
Motion to Dismiss ,
Pleading Standards ,
Qualcomm ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Shareholder Litigation ,
White Collar Crimes
In Weingarten v. Monster Worldwide, Inc., C.A. No. 12931-VCG, 2017 WL 752179 (Del. Ch. Feb. 27, 2017), the Delaware Court of Chancery (Glasscock, V.C.) clarified when a plaintiff has standing to vitiate inspection rights...more
3/10/2017
/ Article III ,
Books & Records ,
Delaware General Corporation Law ,
Demand Letter ,
Equitable Estoppel ,
Inspection Rights ,
Merger Agreements ,
Motion to Compel ,
Section 220 Request ,
Shareholder Litigation ,
Shareholders ,
Standing ,
Stocks ,
Tender Offers
In Gordon v. Verizon Communications, Inc., No. 653084/13, 2017 WL 442871 (N.Y. App. Div. Feb. 2, 2017), the Appellate Division of the Supreme Court of the State of New York, First Judicial Department (the “First Department”),...more
3/3/2017
/ Acquisitions ,
Appeals ,
Attorney's Fees ,
Class Action ,
Disclosure Settlement ,
Mergers ,
Non-Monetary Payments ,
Remand ,
Reversal ,
Settlement ,
Shareholder Litigation ,
Standard of Review ,
Verizon
In In re Walgreen Co. Stockholder Litigation, No. 14 C 9786, 2016 WL 4207962 (7th Cir. Aug. 10, 2016) (Posner, J.), the United States Court of Appeals for the Seventh Circuit issued a highly charged opinion critical of an...more
8/15/2016
/ Appeals ,
Attorney's Fees ,
Corporate Counsel ,
Corporate Restructuring ,
Material Misrepresentation ,
Proxy Statements ,
Putative Class Actions ,
Reversal ,
Shareholder Litigation ,
Standard of Review ,
Strike Suits ,
Supplemental Disclosures ,
Walgreens
In In re Zagg Inc. Shareholder Derivative Action, No. 15-4001, 2016 U.S. App. LEXIS 11095 (10th Cir. June 20, 2016), the United States Court of Appeals for the Tenth Circuit held that stockholders of a Utah-based, Nevada...more
7/5/2016
/ Board of Directors ,
Breach of Duty ,
Demand Futility ,
Derivative Suit ,
Dismissals ,
Exculpatory Clauses ,
Fiduciary Duty ,
Personal Liability ,
Pleading Standards ,
Self-Interest ,
Shareholder Demands ,
Shareholder Litigation
As recently as 2014, nearly 95% of all mergers of public companies valued at $100 million or more triggered stockholder class action litigation. Historically, a large number of merger-related stockholder litigation settled...more
A ruling last fall by the Delaware Chancery Court has prompted a wave of 8 Del. C. § 220 books and records inspection demands on (and threatened litigation against) Delaware corporations that have entered into credit...more
6/11/2015
/ Board of Directors ,
Books & Records ,
Change in Control ,
Credit Agreements ,
Debt Financing ,
Debt Securities ,
Fiduciary Duty ,
Lenders ,
Proxy Put ,
Shareholder Litigation ,
Shareholders
In the consolidated appeal In re Cornerstone Therapeutics Inc., Stockholder Litigation and In re Zhongpin Stockholders Litigation, Nos. 564, 2014 and 706, 2014, 2015 Del. LEXIS 231 (Del. May 14, 2015), the Delaware Supreme...more
Two recent decisions, one from the Delaware Court of Chancery and one from the California Court of Appeal, Fourth Appellate District, refused to apply bylaws that impaired a shareholder/member plaintiff’s ability to pursue...more
The Delaware Supreme Court reversed the Chancery Court’s decision that it lacked authority to impose the requested use restriction, noting that Section 220(c) authorizes the Chancery Court in the exercise of discretion to...more
In Arduini v. Hart, 2014 WL 7156764 (9th Cir. Dec. 17, 2014), the United States Court of Appeals for the Ninth Circuit considered whether the doctrine of issue preclusion prevents a stockholder from relitigating a prior...more
In Jones v. Martinez, 230 Cal. App. 4th 1248 (2014), the California Court of Appeal, Second Division, held that a plaintiff asserting a shareholder derivative action against directors of a Delaware corporation in a California...more