LexisNexis® Legal Newsroom
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...