News & Analysis as of

Conflicts of Interest Breach of Duty Fiduciary Duty

Rumberger | Kirk

Viewpoint: Early Action Key to Mitigating Risk in Professional Liability Claims

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Professional liability claims impact a multitude of professions, including those in the legal, medical, financial and insurance industries. Claims for malpractice, breach of contract, breach of fiduciary duty and related...more

Winstead PC

Court Affirmed The Removal Of An Executor For Gross Mismanagement

Winstead PC on

In Gordon v. Gordon, a couple created a revocable trust and named a friend, who provided financial advice, as successor trustee. No. 03-22-00454-CV, 2024 Tex. App. LEXIS 3611 (Tex. App.—Austin May 23, 2024, no pet. history)....more

King & Spalding

Delaware Chancery Court Issues Precedential Decision Dismissing Claims Challenging “De-SPAC” Merger Disclosures

King & Spalding on

The Delaware Court of Chancery’s recent decision in In re Hennessy Capital Acquisition Corp. IV Stockholder Litigation,1 marks the Chancery Court’s first total dismissal of a complaint alleging breaches of fiduciary duties in...more

Goodwin

Delaware Court of Chancery Rescinds Elon Musk’s $55.8 Billion Compensation Package in Cautionary Tale About Director Independence...

Goodwin on

On January 30, 2024, the Chancellor of the Delaware Court of Chancery struck down the $55.8 billion compensation plan that Tesla, Inc.’s board of directors had granted to Tesla’s well-known CEO, Elon Musk, finding that the...more

Husch Blackwell LLP

When the Payor is Also the Decisionmaker in ERISA Benefits Lawsuits Under 29 U.S.C. § 1132(a)(1)(B)

Husch Blackwell LLP on

When the same health plan administrator both administers a benefit plan and pays the benefits due under the plan, it is considered by courts to have a structural conflict of interest. That conflict of interest is not...more

Patterson Belknap Webb & Tyler LLP

Eight Noteworthy Investment Adviser Enforcement Actions From the First Half of 2023

Presented below is a highlight of eight noteworthy enforcement actions the Securities and Exchange Commission has taken against investment advisers through the second quarter of 2023. Since the beginning of this year, the...more

Proskauer - The Capital Commitment

Ripples Following the SPAC Wave: Litigation and Regulatory Risks

It’s a pattern we often see in boom-and-bust cycles—disputes rising in the period after a wave crests. SPAC deal volume hit an unprecedented high in 2021, but then slowed down in 2022 alongside IPOs. However, the fallout from...more

Seward & Kissel LLP

SEC Settles Charges Against Investment Advisers for Alleged Breaches of Fiduciary Duties

Seward & Kissel LLP on

Who may be interested: Registered Investment Advisers, Mutual Funds, Compliance Officers - Quick Take: The SEC settled charges against two affiliated registered investment advisers, alleging that the advisers failed to...more

Seward & Kissel LLP

Investment Adviser Charged for Failing to Disclose Revenue Sharing Arrangements and Related Conflicts of Interest

Seward & Kissel LLP on

Who may be interested: Investment advisers. Quick Take: The SEC announced settled charges against an investment adviser for the adviser’s breach of its fiduciary duty to its clients by failing to fully and fairly...more

Lathrop GPM

(Almost) Ten Top Tips for Fiduciaries to Avoid Litigation

Lathrop GPM on

​​​​​​​Fiduciaries sometimes find themselves in the unenviable position of facing conflict, whether with or among beneficiaries. In this article we offer some tips for preventing and managing conflicts and approaching the...more

Winstead PC

[Webinar] Financial Services - Advising Trustees Who Manage Closely-Held Business Interests - September 27th, 10:00 am - 11:00 am...

Winstead PC on

Settlors often place some or all of the ownership in a closely-held business in a trust. A trustee managing a trust with an interest in a closely held business has difficult management issues to address and this often raises...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 Rejects Inadequate Disclosure Contentions and Grants Corwin Dismissal

Morris James LLP on

Kihm v. Mott, C.A. No. 2020-0938-MTZ (Del. Ch. Aug. 31, 2021) - Under the Corwin doctrine, a fully informed and uncoerced approval of a board decision by the corporation’s disinterested stockholders can downgrade an...more

Goodwin

SCOTUS Vacates Class Certification In Suit Against Goldman Sachs And Clarifies Appropriate Scope Of Price Impact Evidence

Goodwin on

SCOTUS Vacates Class Certification In Suit Against Goldman Sachs And Clarifies Appropriate Scope Of Price Impact Evidence; Stockholders Strike $110 Million Settlement In Suit Alleging Breaches Of Fiduciary Duties By Former...more

Proskauer - The Capital Commitment

Three Key Considerations for Fund Sponsors when Participating in Bankruptcy Proceedings

We anticipate a more assertive regulatory enforcement program under the Biden administration, particularly focused on fund managers’ conflicts of interest, advisers’ codes of ethics, and related policies and procedures...more

Patton Sullivan Brodehl LLP

LLC Derivative Claims — Sometimes It’s “Now or Never”

One substantial LLC membership right in California (and most other states) is the ability of members to file a “derivative” lawsuit. If the LLC has suffered harm, but the LLC fails to sue (due to managerial inaction,...more

Skadden, Arps, Slate, Meagher & Flom LLP

Delaware Decisions Highlight Pleading Requirements for Fiduciary Duty Claims in the Face of Disinterested Director Approval

Several recent Delaware decisions have analyzed allegations attempting to plead breach of fiduciary duty claims against executive directors even though the underlying transaction was approved by a...more

Goodwin

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

Goodwin on

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

Troutman Pepper

Fraud on the Board: Material Conflicts Must Be Disclosed to the Board to Warrant Business Judgment Review

Troutman Pepper on

A recent decision by the Delaware Supreme Court emphasizes the importance of fully disclosing material director and officer conflicts of interest in connection with proposed M&A transactions. Indeed, as the Court’s ruling...more

White and Williams LLP

Delaware Chancery Court Holds That a Transaction Involving a Conflicted Board Majority Can Be Cleansed If Appropriate Safeguards...

White and Williams LLP on

In a legal challenge to a corporate transaction, the applicable standard of review is often outcome determinative. The deferential business judgment rule applies where the board is not majority conflicted. The burden is on...more

Skadden, Arps, Slate, Meagher & Flom LLP

Key Developments in Delaware Corporation Law

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

Dechert LLP

Electricity in the Air: Court Decides that Stockholder Ratification Not Enough to Insulate Tesla CEO’s $55.8 Billion Compensation...

Dechert LLP on

The Delaware Chancery Court rejected an attempt by Tesla’s Board of Directors to dismiss a challenge to CEO Elon Musk’s “extraordinary” 2018 compensation package. Because Musk is also Tesla’s controlling stockholder, the...more

Kramer Levin Naftalis & Frankel LLP

SEC Sues Investment Adviser for Nondisclosure of Revenue Sharing Agreement Details

On Aug. 1, the Securities and Exchange Commission (the SEC) charged Commonwealth Equity Services LLC, dba Commonwealth Financial Network (Commonwealth), a registered independent investment adviser to private clients (but not...more

Winstead PC

Federal District Court Refuses To Dismiss Aiding And Abetting Breach Of Fiduciary Duty Claim Against A Law Firm

Winstead PC on

In Milligan v. Salamone, the Greenberg Taurig lawfirm represented the bankrupt company when it sued a president and board member. No. 1:18-CV-327-RP, 2019 U.S. Dist. LEXIS 41009 (W.D. Tex. March 14, 2019). Greenberg drafted...more

Dechert LLP

Delaware Supreme Court Clarifies When “Substantive Economic Negotiations” Begin under MFW Framework

Dechert LLP on

In the latest Delaware decision to expound MFW and the structuring of controller transactions, the Delaware Supreme Court clarified the requirement for a controlling stockholder to condition its offer “up front” on MFW’s dual...more

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