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Does D&O Insurance Cover Fee Awards to Derivative Plaintiffs?

A frequent component of derivative litigation resolution is an award to the plaintiffs of the fees and expenses the plaintiffs incurred in pursuing the suit. A contentious, recurring question is whether D&O insurance covers fee awards to derivative litigation plaintiffs. This issue received a...

Slippery People: Corporate Governance at Berkshire Hathaway

Warren Buffet announced the sudden resignation of his heir apparent, David Sokol, on March 30, 2011. Berkshire Hathaway shareholders, fundamental style value investors, law professors , and the business media have been talking about it ever since. However, Buffett doesn't want us to question...

Yet Another Lawsuit Following "No" Vote on "Say on Pay"

On May 25, 2011, In the latest example of shareholders suing a company's board following a negative "say on pay" vote, two union pension funds filed a shareholders' derivative action claiming that Umpqua Holdings Corporation's board violated its duties to investor by approving...

Massey/Alpha and Derivative Claims

Care of our friends over at Courtroom View Network , I've been catching up on the arguments before Vice Chancellor Strine in the Massey Shareholder Litigation. Plaintiffs were seeking an injunction to block a merger between Massey Energy (of Upper Big Branch mine infamy) and Alpha Natural Resources...

In a Must-Read Opinion, Delaware Court Rejects Bid to Block Massey Merger

According to news reports , on June 1, 2011, Alpha Natural Resources completed its $7.1 billion acquisition of Massey Energy Company. The deal went forward despite last minute efforts by groups of Massey shareholders proceeding in West Virginia and Delaware courts to try to enjoin the transaction...

Chancery Allows Claim for Excess Compensation in Sale Transaction

The Ravenswood Investment Company, L.P. v. Winmill, C.A. No. 3730-VCN (Del. Ch. May 31, 2011). Brief Overview This case involved a plaintiff who is a significant stockholder in a holding company managed by the individual defendants, a father and his two sons. The complaint alleges breaches...

Delaware Court of Chancery Orders Trial on Section 220 Claim for Books and Records

The Delaware Court of Chancery yesterday denied a Motion to Dismiss a shareholder's demand for books and records of a company based on DGCL Section 220. The Court ruled that the issue of whether this action was an attempt to circumvent the stay on discovery imposed in a related federal securities...

Google’s $500 Million DOJ Settlement—Any Merit to the Derivative Case?

Google recently reached a $500 million settlement with the Department of Justice over allegations that Google sold ad space that made it possible for foreign pharmacies to unlawfully advertise and sell prescription drugs to U.S. residents. Almost immediately after the settlement was announced a Google...

BP Deepwater Horizon Derivative Suit Dismissed in Favor of English Forum

A wave of litigation followed in the wake of the April 2010 Deepwater Horizon oil spill. Among this litigation were several shareholder derivative suits filed against certain directors and officers of BP and of its U.S. subsidiary. At the time these cases first arose, I asked whether or not these...

Delaware Chancery Court Enters $1.263 Billion Shareholders' Derivative Suit Award

In an interesting October 14, 2011 post-trial opinion, Delaware Chancellor Leo Strine entered a $1.263 billion award in the Southern Peru Copper Corporation Shareholder Derivative Litigation. The lawsuit relates to Southern Peru's April 2005 acquisition of Minerva México, a Mexican mining...

Massey Gets Its Due

Back in the summer, there was a 'to-do' about the Massey shareholder litigation. You'll remember that shareholders brought a derivative suit against the directors for violations of their fiduciary duties in the running of the company that ended with a disaster at the Upper Big Branch...

Francis Pileggi Discusses Delaware Supreme Court’s Sidestep of Proper Purpose Requirement Issue in Central Laborers Pension Fund v. News Corp.

Francis G.X. Pileggi of Eckert Seamans Cherin & Mellott, LLC, discusses Central Laborers Pension Fund v. News Corp . No. 682, 2011 (Del. May 29, 2012). The issue on appeal to the Delaware Supreme Court was whether one can satisfy the proper purpose requirement of Delaware General Corporation Law...

Demand ... Refused

For all you law students out there who are mystified by the procedural niceties of derivative litigation (actually, I should include a pile of politicians and media types in this group as well), AIG has filed a copy of its demand refusal with the SEC. It's right here . You'll also find a copy...

Chancery Dismisses Duplicative Delaware Suit in Favor of First-Filed California Case

In Re Diamond Foods, Inc . Derivative Litigation , C.A. No. 7657-CS (Del. Ch. Feb. 28, 2013) [ an enhanced version of this opinion is available to lexis.com subscribers ]. Issue Addressed : Whether a derivative suit filed in Delaware should be dismissed in favor of a similar first-filed action...

Final Approval of $2.4B Settlement Granted in Bank of America Securities Suit

NEW YORK - (Mealey's) A federal judge in New York on Apr. 5 granted final approval of a $2.4 billion settlement between shareholders and Bank of America Corp. (BoA) to settle claims that it and certain of its executive officers and directors misrepresented the company's business and financial...

D&O Insurance to Fund Entire "Largest Ever" $139 Million News Corp. Derivative Suit Settlement

In what the plaintiffs' lawyers claim to be the largest derivative lawsuit settlement ever, the parties to the News Corp. shareholder derivative litigation have agreed to settle the consolidated cases for $139 million. The company also agreed to tighten oversight of the company's operations...

Don't Sue A North Carolina Board Of Directors Over A Merger Without Reading This Case

Last week's Order in Gusinsky v. Flanders Corp ., 2013 NCBC 46 [ an enhanced version of this opinion is available to lexis.com subscribers ], should be required reading for lawyers thinking of suing the directors of a corporation in North Carolina over a merger transaction. It provides guidance on...

Dismissal Granted in Cyber Breach-Related Derivative Suit Filed Against Wyndham Officials

Along with the separate derivative lawsuit filed against Target Corporation’s board, the cyber breach-related derivative action filed against Wyndham Worldwide Corporation’s board has been closely watched as representative of a potential new area liability exposure for corporate directors...

Creditors’ Rights to Pursue Derivative Claims Against Company Directors Under Delaware Law

In a detailed May 4, 2015 opinion ( here ), Vice Chancellor Travis Laster of the Delaware Chancery Court extensively reviewed the rights of an insolvent company’s creditors to pursue derivative claims against the company’s directors [ an enhanced version of this opinion is available to lexis...

Independent Directors Have New Ammunition to Obtain Dismissal of Suits

A recent Delaware Supreme Court decision that provides independent directors with a new basis to be dismissed from lawsuits against them, was highlighted in my latest article published in Directorship , the magazine of the National Association of Corporate Directors. The case is styled: In re Cornerstone...