LexisNexis® Legal Newsroom
Chancery Rejects Request to Enjoin Hertz Takeover of Car Rental Rival Dollar Thrifty

In Re Dollar Thrifty Shareholder Litigation, C.A. No. 5458 (Del. Ch., Sept. 8, 2010), read 84-page opinion here . The Court of Chancery issued this opinion last night, denying the request for a preliminary injunction to block the merger by which Hertz would buy the shares of its smaller car rental...

This Investment Adviser Should Have Listened to Gordon Gekko

In the initial Wall Street film, financier Gordon Gekko says the now-famous line "greed is good." In the recently released sequel, Wall Street, Money Never Sleeps , Mr. Gekko repeats the line, noting "now it seems it's legal." Later he amplifies citing the old investment saw...

Statutory Fiduciary Duties, Unocal, and Revlon Outside Delaware

I've written on this before . In the 1980s during the great takeover boom and hollowing out of the industrial heartland, many states adopted amendments to their corporate codes that codified directors' fiduciary duties. In general, these provisions made it clear that a director need not "maximize...

Virginia Business Owners Smacked For Paying Themselves Excessive Fees

Two owners of a Virginia restaurant breached their fiduciary duty to the corporation they managed by paying themselves exorbitant management fees and by making improper loans and distributions to themselves, a Fairfax County judge has found. "Fiduciary duty" in this context generally...

Troutman Sanders LLP: Second Circuit Adopts Moench Presumption of Prudence in ERISA Litigation

By Pamela L. Signorello, Kim S. Orbeck, Terrence R. McInnis and Cathy A. Simon, On October 19, 2011, the U.S. Court of Appeals for the Second Circuit affirmed the dismissal of two putative class actions alleging that ERISA fiduciaries breached their duties to plan participants by imprudently continuing...

Williams Mullen: Fourth Circuit Rules That Retirement Plan Trustees’ Failures Must Have Causal Link to Plan Losses In Order to Hold Trustees Liable: Plasterers’ Local Union No 96 Pension Plan v. Pepper, No. 10-1364 (4th Cir., December 1, 2011)

BY: MARK S. THOMAS & ROBERT W. SHAW The U. S. Court of Appeals for the Fourth Circuit has ruled that retirement plan trustees cannot be held liable for failures to investigate the prudence of plan investments or to diversify those investments, unless there is a proven causal link between such...

Do Managers of Delaware LLCs Have the Same Fiduciary Duties as Directors of Delaware Corporations?

Recently, the Delaware Court of Chancery issued a ruling on the question of whether a manager (or managing member) of a Delaware limited liability company owes fiduciary duties to the company and its members. The court ruled that it does. As a legal practitioner, this result is unsurprising. ...

Francis Pileggi and Kevin Brady Discuss the Delaware Court of Chancery’s Recent Rulings in Auriga Capital Corp. v. Gatz Properties

Francis Pileggi and Kevin Brady of Eckert Seamans discuss several aspects of recent rulings by the Delaware Court of Chancery in Auriga Capital Corp. v. Gatz Properties LLC, C.A. No. 4390-CS (Del. Ch., Jan. 27, 2012). On the Delaware Corporate and Commercial Litigation Blog , they write that the case...

Troutman Sanders LLP: The Next Frontier in Fiduciary Oversight Litigation?

By Jonathan A. Kenter and Gail H. Cutler In the latest of a series of high-profile class action suits against large 401(k) plans, ABB, Inc., a North Carolina power generation products manufacturer, and its 401(k) plan committees, were held jointly and severally liable, for a record $37 million in damages...

Williams Mullen: 11th Circuit Rules Home Depot Plan Fiduciaries Did Not Breach Their Duties Related To The Plan's Company Stock Fund

B y M ark S. Thomas and Robert W. Shaw In Lanfear v. Home Depot, Inc. , No. 10-13002 (11th Cir. May 8, 2012) [ enhanced version available to lexis.com subscribers ], the U.S. Court of Appeals for the Eleventh Circuit joined five other federal circuit courts in adopting a presumption that, in the absence...

THIS WEEK IN SECURITIES LITIGATION (Week ending June 1, 2012)

SEC enforcement this holiday shortened week dismissed the remaining defendants in an insider trading case centered on an international take over which had been filed largely on the trading and within days of the announcement. The Court cited discovery difficulties which in part traced to the defendants...

Bank Not Liable For Embezzlement, Says NC Business Court

Do you have a client who says his associate embezzled a lot of his money? Does he want to sue the Bank that held the funds, claiming that the Bank should have known that misdoings were afoot and blown the whistle? You'd better tell him to think twice before bringing that claim to the Business Court...

It's A First: Fiduciary Duty Claim Sticks Against A Bank

For the first time that I am aware of, the Business Court has found a Complaint to sufficiently allege a breach of fiduciary duty claim against a bank, in today's opinion in WNC Holdings, LLC v. Alliance Bank & Trust Co . , 2012 NCBC 50. The case has a familiar ring to it on the facts. Real...

Chancery Addresses Default Fiduciary Duties in LLC and Advancement Issues

Zimmerman v. Crothall , C.A. No. 6001-VCP (Del. Ch. Jan. 31, 2013) Issue Presented This 74-page opinion addresses the allegations of a minority unitholder in an LLC who asserts claims that the directors breached their fiduciary duties in connection with several financing transactions. Brief...

O Lord Don't Buy The Nanny a Mercedes-Benz

The order Wednesday of last week in Patriot Performance Materials, Inc. v. Powell , 2013 NCBC 10 was appropriately timed for the day before Valentine's Day. Powell, the Defendant, had a 50% interest in several businesses with Henderson, one of the Plaintiffs. He alleged in a third party...

Default Fiduciary Duties Coming for Delaware LLCs

There has been a back and forth between the Chancery Court and the Delaware Supreme Court about whether there are default fiduciary duties for LLCs. The Chancery Court takes the position that there are default fiduciary duties, though you may contract around them. The Supreme Court on the other...

Custodial Bank Wins Jury Verdict in Ponzi Scheme Case

A group of investors in the Madoff case suffered a loss when the jury verdict was announced in favor of Westport National bank and its parent, Connecticut Community Bank. Read the following article for more information about the jury verdict and the related settlement with some of the investors: http...

To Whom Are Directors' Duties Owed?

It is generally understood that corporate directors act in a fiduciary role in performing their board duties. But to whom do directors owe their fiduciary duties? That was the question asked in a November 8, 2013 decision from the North Carolina Supreme Court, in which the Court reversed a trial verdict...

Should Bank Directors’ Fiduciary Duties Be Expanded?

A recurring question is whether bank directors should be held to a more stringent fiduciary duty than are the directors of other kinds of companies. The question has been raised in the current wave of failed bank litigation, as the FDIC has tried to argue, for example, that bank directors are not entitled...

Third Circuit Rejects Claim That Fiduciary Duty Required For Insider Trading

Insider trading cases frequently turn on the nature of the relationship between the trader and the person who is the source of information. The breach of that relationship of trust and confidence can supply the statutory element of deception, the predicate for a violation of Exchange Act Section 10(b...

Supreme Court Hears Limitations Question in Imprudent Retention Case

WASHINGTON, D.C. — (Mealey’s) The Ninth Circuit U.S. Court of Appeals erred in holding that Employee Retirement Income Security Act Section 413(1) bars claims that plan fiduciaries breached their duty of prudence by offering higher-cost retail-class mutual funds to plan participants, even...

Creditor’s Fiduciary Duty Claims Proceed Based on Traditional Insolvency Test

Quadrant Structured Products Company, Ltd. v. Vertin , C.A. No. 6990-VCL (Del. Ch. May 4, 2015) [ an enhanced version of this opinion is available to lexis.com subscribers ]. This Court of Chancery opinion is destined to be cited as a seminal ruling for its historical and doctrinal analysis of important...

Supreme Court Says Trust Law Informs Limitations Question in Imprudent Retention Case

WASHINGTON, D.C. — (Mealey’s) The U.S. Supreme Court ruled in a unanimous opinion today that the Ninth Circuit U.S. Court of Appeals erred in holding that Employee Retirement Income Security Act Section 413(1) bars breach of fiduciary duty claims based on the fiduciaries’ initial selection...

U.S. Supreme Court Makes It Easier for Plan Sponsors to Challenge the Prudence of 401(k) Investment Options

On May 18, 2015, the U.S. Supreme Court handed down a unanimous decision that effectively expands the time period during which a 401(k) plan participant may file suit for certain ERISA violations. In Tibble v. Edison International , the Court considered the Ninth Circuit Court of Appeal’s decision...

Will the Real Owners Please Stand Up?

What is an owner? And, what is an owner of a publicly traded corporation ? It’s clear that they are not the same thing. We don’t own a corporation like we own a car or property. Even individual owners of corporate stock don’t really “own” the corporations. We have neither...