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Fiduciary Duty Shareholders Standard of Review

A&O Shearman

Delaware Court Of Chancery “Barely” Sustains Claims Challenging Representations About Value Of SPAC Shares

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On October 18, 2024, Vice Chancellor Glasscock of the Delaware Court of Chancery declined to dismiss a putative class action brought by stockholders of special purpose acquisition company (“SPAC”) Mountain Crest Acquisition...more

A&O Shearman

Delaware Chancery Court Applies Entire Fairness To State Of Incorporation Conversions

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On February 20, 2024, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery denied in part and granted in part a motion to dismiss a stockholder action against TripAdvisor, Inc. and its parent (together, the...more

A&O Shearman

Court Of Chancery Rescinds CEO Compensation Package Under Entire Fairness Review

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In a January 30, 2024, post-trial ruling, Vice Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery rescinded a compensation package valued at $55.8 billion awarded by Tesla, Inc. to its CEO,...more

A&O Shearman

Delaware Court Of Chancery Holds That Controlling Stockholder Conduct Did Not Breach Fiduciary Duties But Rendered Buyout...

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On January 24, 2024, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery awarded a stockholder plaintiff class more than $18 million, finding that the acquisition of the “Hometown” division of Sears Hometown...more

Dechert LLP

Delaware Court of Chancery Identifies Fiduciary Duties and Standard of Review for Controlling Stockholder

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In a landmark decision, In re Sears Hometown & Outlet Stores, Inc. Stockholder Litigation,1 the Delaware Court of Chancery held that a controlling stockholder did not breach his fiduciary duties when he amended company bylaws...more

A&O Shearman

Delaware Court Of Chancery Concludes Founder And Largest Shareholder Was Not A Controller In Connection With Allegedly Conflicted...

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On May 12, 2023, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery ruled in favor of defendant, the founder and largest shareholder (the “Founder”) of a technology company (the “Company”), on derivative...more

A&O Shearman

Pair Of Delaware Chancery Court Decisions Deny Motions To Dismiss SPAC Shareholder’s Fiduciary Breach Claims, Following MultiPlan

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On January 4, 2023, and again on March 1, 2023, Vice Chancellor Lori Will of the Delaware Court of Chancery denied motions to dismiss claims against directors and controlling shareholders of GigCapital-affiliated special...more

A&O Shearman

Delaware Court Of Chancery Denies Motion To Dismiss Breach Of Fiduciary Duty And Unjust Enrichment Claims Related To Compensation...

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On April 27, 2022, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery denied, in part, a motion to dismiss a derivative complaint against directors for breaches of fiduciary duties brought by stockholders of...more

Latham & Watkins LLP

Delaware Court Applies Entire Fairness Standard to MultiPlan de-SPAC

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The decision adopts enhanced scrutiny of director fiduciary duties for de-SPAC transactions, but suggests dismissal may be appropriate when stockholders exercise redemption rights on a fully informed basis. On January 3,...more

A&O Shearman

Delaware Court Of Chancery Sustains Class Action Claims For Breaches Of Fiduciary Duties And Aiding And Abetting Arising From...

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On January 3, 2022, Vice Chancellor Lori W. Will of the Delaware Court of Chancery largely denied a motion to dismiss a putative class action brought by the stockholders of Churchill Capital Corp. III, a special purpose...more

Jones Day

Delaware Chancery Court Strikes 5% Poison Pill With "Extreme" Features

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The Background: The Delaware Chancery Court held that a board of directors breached its fiduciary duties in adopting a shareholder rights plan, or "poison pill," with an unprecedented combination of "extreme" features,...more

A&O Shearman

Delaware Court Of Chancery Dismisses Derivative Claims For Failure To Plead Demand Futility Notwithstanding Unocal Enhanced...

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On November 20, 2020, Vice Chancellor Morgan T. Zurn of the Delaware Court of Chancery dismissed stockholder derivative claims against the directors of Christopher & Banks Corporation.  Gottlieb v. Duskin, C.A. No....more

Morris James LLP

Court Of Chancery Expands MFW To Recapitalization

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IRA Trust FBO Bobbie Ahmed v. Crane, C.A.. 12742-CB (December 11, 2017) - This is an important decision because it extends the holding of MFW to a stock reclassification. Under the 6-part test of MFW, the business judgment...more

Skadden, Arps, Slate, Meagher & Flom LLP

Activists at the Gate: Court of Chancery Weighs In on Claims Involving Activist Stockholders

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

Morris James LLP

Court Of Chancery Explains Corwin Limits

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This is an important decision if only because it explains a further limitation on the Corwin rule that an informed uncoerced stockholder vote insulates a corporate transaction from attack. First, the decision explains when a...more

Skadden, Arps, Slate, Meagher & Flom LLP

"Q&A With Delaware Litigation Partner Ed Micheletti"

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

Morris James LLP

Court of Chancery Dismisses Derivative Claims Even Though Entire Fairness Arguably Applied

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Delaware’s requirements for stockholders to maintain derivative actions reflect the twin principles of director management and control and accountability. Because directors manage the business and affairs of Delaware...more

Skadden, Arps, Slate, Meagher & Flom LLP

"Fairness of Director Awards Granted Under Market-Standard Equity Plans Comes Under Increased Scrutiny"

A Delaware court opinion issued late last week may subject equity grants to directors to increased judicial scrutiny (Calma v. Templeton, No. 9579-CB (Del. Ch. Apr. 30, 2015)). In Calma, the Chancery Court denied the...more

Wilson Sonsini Goodrich & Rosati

The Delaware Court of Chancery Finds Two Transactions Were Not Entirely Fair, but Awards No Damages Where the Prices of the...

On September 4, 2014, the Delaware Court of Chancery issued two lengthy post-trial opinions, both authored by Vice Chancellor John W. Noble, finding that recapitalization or restructuring transactions did not satisfy the...more

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