Bar Exam Toolbox Podcast Episode 167: Listen and Learn -- Direct and Derivative Actions (Corporations)
Board Diversity Podcast
Securities Litigation and Disclosure Issues
Podcast: CFTC Issues LIBOR Transition Relief for Swaps
When a shareholder sues derivatively, the shareholder is seeking relief not for itself, but for the corporation. Therefore, it should be expected that the shareholder is not free to compromise or dismiss the suit absent...more
Delaware corporations are not permitted to pursue profits by violating the law. Under Caremark and its progeny, directors’ fiduciary duties include the good faith obligation to oversee and monitor the corporation’s compliance...more
In a recent post, Professor Stephen Bainbridge discusses the question of when a controlling shareholder owes fiduciary duties to minority shareholders. Knowing when controlling shareholder owes fiduciary duties is one thing,...more
My last few posts have been devoted to the Court of Appeal's opinion in Tuli v. Specialty Surgical Center of Thousand Oaks, LLC, 2024 WL 4499271 (Oct. 16, 2024). The case relates to the plaintiff's "decade-long litigation...more
Under the business judgment rule, "a director is not liable for a mistaken business judgment which is made in good faith and in what he or she believes to be in the best interest of the corporation, where no conflict of...more
Traditionally, this has been the main type of derivative suit that has resulted in large settlements. Merger and acquisition cases are common here. Examples of these types of suits include Paramount Global (CBS-Viacom merger)...more
In re Cognizant Technology Solutions Corporation Derivative Litigation, the United States Court of Appeals for the Third Circuit, sitting en banc, overruled its prior decision in Blasband v. Rales that applied an...more
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
Harper v. Sievert, C.A. No. 2022-0819-SG (Del. Ch. May 31, 2024). A stockholder plaintiff brought derivative claims alleging that current and former directors of T-Mobile US, Inc. were liable for aggregating customers’...more
City of Sarasota Firefighters’ Pension Fund v. Inovalon Holdings Inc., No. 305, 2023 (Del. May 1, 2024). The Delaware Supreme Court’s decision in Khan v. M & F Worldwide Corp. (“MFW”) established a cleansing process for a...more
If Sisyphus were a judge, he’d be assigned the Fuks case. Fuks began on December 26, 1996. Fire up your mental time machine, travel back in time, and picture what was going on in your life those many years ago....more
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
All empires eventually decline. For decades, Delaware has held the crown as the premier state of incorporation for domestic companies (and many foreign companies seeking a foothold in the United States capital markets). But...more
Under Armour on Friday said it has agreed to pay $434 million to settle a 2017 class action lawsuit accusing the sports apparel maker of defrauding shareholders about its revenue growth in order to meet Wall Street forecasts....more
Closely-held business entities come in all shapes and sizes. By definition, under Partnership Law § 10, it takes “two or more” owners to form a general partnership. But corporations and LLCs have no such impediment, ranging...more
Boards of Delaware corporations control the company’s assets, which includes by default derivative claims for breach of fiduciary duty against the company’s directors and officers. When derivative claims survive dismissal...more
On April 4, 2024, the Delaware Supreme Court issued a much-anticipated decision, In re Match Group Derivative Litigation (“In re Match Group”), extending the MFW doctrine more broadly to all conflicted controller...more
The power to bring a claim for breach of duty causing injury to a Delaware corporation resides with the board of directors. It is part of their duty under Section 141(a) of the Delaware General Corporation Law to manage the...more
Clem v. Skinner, et al., C.A. 2021-0240-LWW (Del. Ch. Feb. 19, 2024) - This Caremark decision involved the retail pharmacy company, Walgreens, and concerned billing practices for a particular insulin pen product that gave...more
In re Oracle Corp. Deriv. Litig., Consol. C.A. No. 2017-0337-SG (Del. Ch. Feb. 7, 2024) - Under the mootness rule, a stockholder plaintiff can be awarded attorneys’ fees when the plaintiff’s litigation efforts result in...more
Tornetta v. Musk, et al., C.A. 2018-0408-KSJM (Del. Ch. Jan. 30, 2024) - Stockholders of Tesla, Inc. brought a derivative action against Elon Musk and six individual Tesla directors, alleging that the directors breached...more
Palkon v. Maffei, C.A. 2023-0449-JTL (Del. Ch. Feb. 20, 2024) - This decision arose out of TripAdivor’s conversion from a Delaware corporation into a Nevada corporation. The company’s CEO and Chair had voting control and...more
On April 4, 2024, in an opinion authored by Chief Justice Collins J. Seitz, Jr., the Supreme Court of Delaware sitting en banc held that the framework articulated in Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014)...more
Principal Growth Strategies LLC v. AGH Parent LLC, C.A. 2019-0431-JTL (Del. Ch. January 25, 2023) - This decision provides helpful guidance to practitioners to address pleading-stage arguments for dismissal. The plaintiff...more
Like many questions in the law, the answer to the question of whether a member of a California nonprofit corporation may maintain a derivative action is "it depends"....more