Rights plans are one of the most effective takeover defenses, despite the decrease in use over the past decade. This article focuses on ten key issues that any board should consider when making a decision relating to a rights plan.
The authors write: While rights plans, or "poison pills"...
Lingo v. Lingo, No. 713, 2009 (Del. Supr., June
10, 2010), read opinion here. The factual background of this Delaware
Supreme Court decision involves a faithless fiduciary who abused the Power
of Attorney given to her, but the part of the opinion that will be of interest for
readers of this blog...
Relatively few cases address the fiduciary
duties of an acquiring board. These cases indicate that, absent a conflict of
interest, courts will generally apply the deferential standard of the business
judgment rule to a board's acquisition decision. Nonetheless, recent highly
publicized failed acquisitions...
Related Westpac LLC v. JER Snowmass LLC ,
C.A. No. 5001-VCS (Del. Ch. July 23, 2010), read opinion here .
This case involves a suit between members of two LLCs
formed to pursue a land development project in Snowmass, Colorado. When the
funding needs of the project exceeded the...
Yucaipa American Alliance Fund II, L.P. v
Riggio , C.A. No. 5465-VCS (Del. Ch. Aug. 12, 2010), read
post-trial opinion here. This
Delaware Court of Chancery opinion rejected breach of fiduciary duty claims and
upheld the poision pill defense that Barnes & Noble implemented as
part of a plan...
Recent decisions of the Delaware courts have clarified the
remedies for breaches of the duty of disclosure. The duty of disclosure owed by
directors to stockholders is not a separate fiduciary duty, but instead an
application of the duties of care and loyalty. In In re Transkaryotic
Therapies, Inc. ...
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...
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
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...
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...
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...
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
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 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,
On the Delaware Corporate and Commercial Litigation Blog , they
write that the case...
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...
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...
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...
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...
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...
v. Crothall , C.A. No. 6001-VCP (Del. Ch. Jan. 31, 2013)
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.
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...
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
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...
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...