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Breach of Duty Shareholder Litigation Corporate Officers

Allen Matkins

Is Your Directors And Officers Liability Coverage Illusory?

Allen Matkins on

Many corporations pay significant amounts for directors and officers liability policies.  Commonly referred to as D&O policies, these policies usually involve three sides.  Directors and officers are likely to have the most...more

Bennett Jones LLP

Delaware Court Affirms High Threshold for Breach of Directors' Caremark Duties

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In a recent case, Bricklayers Pension Fund of Western Pennsylvania (derivatively on behalf of Centene Corporation) v Brinkley (Centene), Delaware's Court of Chancery dismissed “Caremark duty claims”—named after the 1996 case...more

Allen Matkins

Nevada Supreme Court Rejects The "Uncontrollable Child" Theory Of Parent-Subsidiary Relationships

Allen Matkins on

Nevada famously limits directors and officers from personal liability.  However, it would be an overstatement to say that Nevada is a "liability free" jurisdiction.  For example, the Nevada Supreme Court recently held that...more

Bennett Jones LLP

Delaware Courts Confirm High Standard for Breach of Oversight Duty Applies Equally to Officers and Directors

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In the United States, corporate directors and, as confirmed by the Delaware Court in McDonald’s Corp. Stockholder Derivative Litigation (McDonald), corporate officers owe, as a subset of their duty of loyalty, a duty to...more

Allen Matkins

Do Corporate Boards Necessarily Breach Their Fiduciary Duties When They Approve Illegal Conduct?

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In a recent blog post on the Business Law Prof Blog, Tulane Law professor Ann M. Lipton opined...more

Allen Matkins

Can One Shareholder Sue Another Shareholder For Breach Of Contract?

Allen Matkins on

One popular theory of the corporation is that it is a nexus of contracts.  As Frank Easterbrook and Daniel Fischel pithily pronounced "Corporations are enduring (relational) contracts."  F. Easterbrook and D. Fischel, The...more

Wilson Sonsini Goodrich & Rosati

Officer Exculpation and the Silicon Valley 150

Effective August 1, 2022, Section 102(b)(7) of the Delaware General Corporation Law (DGCL) was amended to permit a Delaware corporation to include in its charter a provision eliminating or limiting the personal liability of...more

A&O Shearman

Delaware Court of Chancery Finds Revlon Violation For Founder Who Favored Buyer And Failed To Disclose, And Aiding & Abetting...

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On March 15, 2022, Chancellor Kathaleen McCormick of the Delaware Court of Chancery ruled that the founder and former CEO of Mindbody Inc. (the “Company”) breached his fiduciary duties to stockholders in connection with the...more

Wilson Sonsini Goodrich & Rosati

In Rare Decision, Delaware Court of Chancery Imposes Liability on CEO and Acquiror Post-Trial

On March 15, 2023, Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery issued a rare post-trial decision finding a CEO personally liable for millions of dollars in damages for breaching his fiduciary...more

Bennett Jones LLP

Delaware Court Extends a Director's Duty of Oversight to Officers—What Could This Mean for Canadian Directors and Officers?

Bennett Jones LLP on

In the United States, corporate directors owe, as a subset of their duty of loyalty, a duty to monitor and oversee the operations of the company, referred to as the "duty of oversight" in this blog. This duty is known as the...more

Manatt, Phelps & Phillips, LLP

Storming The Arches: Corporate Officers Owe Duty of Oversight Per Delaware Court of Chancery

The Delaware Court of Chancery has recently held in In re McDonald’s Corporation Stockholder Derivative Litigation that shareholders can pursue a derivative claim for breach of the fiduciary duty of oversight against...more

Brownstein Hyatt Farber Schreck

Delaware Court Extends Fiduciary Duty of Oversight to Corporate Officers

For companies incorporated in Delaware (and beyond), it may be time to reexamine a number of issues impacting senior leadership from a variety of perspectives, including corporate governance, indemnification provisions,...more

Morris James LLP

Court of Chancery Rules That Corporate Officers Have a Duty of Oversight Within Their Corporate Area of Responsibility

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Delaware courts have firmly established that directors have oversight duties under the good-faith component of the fiduciary duty of loyalty. In the seminal Caremark decision, the Delaware Court of Chancery held that...more

Sheppard Mullin Richter & Hampton LLP

Delaware Court of Chancery Holds that Officers of a Delaware Corporation Are Subject to Fiduciary Duty of Oversight

In In re McDonald’s Corp. Stockholder Derivative Litigation, No. 2021-0324 (Del. Ch. Jan. 26, 2023), the Delaware Court of Chancery (Laster, V.C.) held that officers of a Delaware corporation are subject to a fiduciary duty...more

A&O Shearman

Delaware Court Of Chancery Declines To Dismiss Breach Of Fiduciary Duty Claims Against Nondirector Officer, Holding That Officers...

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On January 25, 2023, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery denied a motion to dismiss a derivative suit brought by stockholders asserting breach of fiduciary duty claims against a former officer...more

Wilson Sonsini Goodrich & Rosati

Delaware Court of Chancery Concludes That Duty of Oversight Applies to Officers

In an important decision addressing an issue of first impression, the Delaware Court of Chancery determined that corporate officers owe a fiduciary duty of oversight under Delaware law. The case, In re McDonald’s Corporation...more

A&O Shearman

Delaware Court Of Chancery Dismisses Breach Of Fiduciary Duty Claims Against Special Committee Defendants For Failure To Plead...

A&O Shearman on

On November 30, 2022, Vice Chancellor Glasscock of the Delaware Court of Chancery granted a motion to dismiss claims asserted against directors who served as members of the special committee (the “Special Committee”) of...more

A&O Shearman

New York Appellate Court Dismisses Breach Of Fiduciary Duty Claims Under Foreign Law, Clarifying That The Internal Affairs...

A&O Shearman on

On October 13, 2022, a five-judge panel of the Appellate Division of the New York State Supreme Court, First Department, unanimously reversed a trial court decision and dismissed a breach of fiduciary duty action brought by...more

Bennett Jones LLP

Court Decision Highlights "Nominee" Director Issues

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Key Highlights - - Centerra Judge found the breaches of fiduciary duties the most egregious he had ever seen. - Nominee director principles in Centerra are relevant to directors of corporations governed by the Canada...more

A&O Shearman

Delaware Court Of Chancery Denies Motion To Dismiss Breach Of Fiduciary Duty Claim Against Director Who Abstained From Merger Vote

A&O Shearman on

On May 25, 2022, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery denied a motion to dismiss a stockholder derivative claim against a director of Fat Brands Inc. (the “Corporation”) for alleged breach of...more

Allen Matkins

Federal Court Applies Demand Excused Test When Demand Was Allegedly Made

Allen Matkins on

I must confess that I confess that I am nonplused by a recent ruling by U.S. District Court Judge James A. Teilborg in SinglePoint Direct Solar LLC v. Curiel, 2022 U.S. Dist. LEXIS 19880.  The case involved, among other...more

A&O Shearman

Delaware Court Of Chancery Rejects Motion To Stay SPAC Breach Of Fiduciary Duty Suit Pending Parallel Federal Securities Action

A&O Shearman on

On March 7, 2022, Vice Chancellor Lori W. Will of the Delaware Court of Chancery denied a motion to stay a putative class action brought by legacy stockholders of DiamondPeak Holding Corp., a special purpose acquisition...more

A&O Shearman

Delaware Court Of Chancery Dismisses Derivative Claims Challenging A Convertible Debt Issuance At The Onset Of The COVID-19...

A&O Shearman on

On November 23, 2021, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery dismissed stockholder derivative claims for breach of fiduciary duty against the directors of Wayfair, Inc. (the “Company”). ...more

Goodwin

Northern District of California Dismisses Shareholder Derivative Suit Concerning Lack of Diversity

Goodwin on

Northern District of California Dismisses Shareholder Derivative Suit Concerning Lack of Diversity; Delaware Court of Chancery Dismisses Stockholder Suit Against Medical Device Company for Failure to Plead Demand Futility;...more

Allen Matkins

"Refusal To Acquiesce" To Director's Removal Results In Multimillion Dollar Damage Award

Allen Matkins on

A recent holding by the Second District Court of Appeal is a cautionary tale for directors who fail to acquiesce to a director's removal from the board.  Association for Los Angeles Deputy Sheriffs v. Macias, 63 Cal. App. 5th...more

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