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Applying Morrison, Court Rejects Toyota Shareholders' Japanese Law Securities Claims

The U.S. Supreme Court's June 2010 decision in Morrison v. National Australia Bank looked like the end of securities claims in U.S. courts on behalf so-called "f-cubed" claimants - that is, foreign shareholders of foreign-domiciled companies who bought their shares on foreign exchanges...

Central District Of California Rejects Toyota Shareholders' Japanese Law Securities Claims

The U.S. Supreme Court's June 2010 decision in Morrison v. National Australia Bank looked like the end of securities claims in U.S. courts on behalf so-called "f-cubed" claimants - that is, foreign shareholders of foreign-domiciled companies who bought their shares on foreign exchanges...

Derivative Lawsuits on Radar of Failed Say-on-Pay Vote Companies

by Gary Larkin If you sit on the board of any of the 39 companies that had a failed Say on Pay vote the past proxy season, I don't need to tell you that despite the fact the votes were only "advisory" there will be some shareholder repercussions. In the past year, seven companies...

Erica P. John Fund v. Halliburton: What is the Basic Presumption Worth?

Excerpt: Erica P. John Fund, Inc. v. Halliburton Co, No. 09-1403 has the potential to rewrite the standards for certifying a class in securities fraud actions. The High Court heard argument on April 25, 2011 and should hand down its decision prior to the end of the term in June. The issue the Court...

Dentist's Emails Satisfied Demand Requirement For Derivative Action

This week, Judge Jolly permitted a 50% shareholder to pursue derivative and individual claims against her co-shareholder. He found that the plaintiff had satisfied the demand requirement of G.S. sec. 55-7-42, and that she fit an exception to the general rule that a shareholder cannot pursue an individual...

Some Thoughts About "Board Accountability"

Yahoo's board members may or may not be "doofuses" as departed Yahoo CEO Carol Bartz declared after they sacked her, but the one thing for sure is that the events surrounding her firing, and the more recent CEO turnover at H-P, sure have folks riled up. Whatever else you want to say...

Revolt of the Shareholder Plaintiff

Wait ... this is unusual. According to a piece by Tom Hals of Reuters , the lead plaintiff - not his lawyer, but the lead plaintiff himself - is opposing settlement of the shareholder litigation in the J Crew transaction. The J Crew MBO was on the receiving end of a shareholder lawsuit and for good...

A Lump of Coal from the Fourth Circuit for a Wachovia Shareholder

The Fourth Circuit delivered a lump of coal right before Christmas to a Wachovia shareholder whose 100,000 shares of the Bank's stock, once worth about $5.6 million, sank into near worthlessness when Wachovia failed. The case, decided December 23rd, is Rivers v. Wachovia Corp. , [ an enhanced...

Wachovia Shareholder Gets a Lump of Coal From 4th Circuit

The Fourth Circuit delivered a lump of coal right before Christmas to a Wachovia shareholder whose 100,000 shares of the Bank's stock, once worth about $5.6 million, sank into near worthlessness when Wachovia failed. The case, decided December 23rd, is Rivers v. Wachovia Corp. , [ an enhanced version...

Changes in the Plaintiffs' Class Action Bar and the Changing World of Shareholder Litigation

The changing mix of corporate and securities litigation is a recent phenomenon on which I have frequently commented on this blog . While identifying the fact of the change is relatively straightforward, explaining it is more challenging. According to a January 11, 2012 article in The Review of Securities...

Changing Securities Litigation Pattern Result Of Changes In Plaintiff's Securities Litigation Bar

The changing mix of corporate and securities litigation is a recent phenomenon on which I have frequently commented on this blog . While identifying the fact of the change is relatively straightforward, explaining it is more challenging. According to a January 11, 2012 article in The Review of Securities...

Prior to Derivative Suit, Shareholder Demand Must Clearly Identify Wrong and Demand Action

A shareholder acting on behalf of a corporation may bring a "derivative suit" against corporate directors and management for fraud , mismanagement, self-dealing or dishonesty. Before bringing such a suit, the shareholder must make a written demand that clearly identifies the alleged wrong...

Court Refuses to Dismiss Caremark Claims; Touts Benefits of Pre-Complaint Section 220 Books and Records Action in Demand Futility Analysis

In Re China Agritech, Inc. Shareholder Derivative Litigation , C.A. No. 7163-VCL (Del. Ch. May 21, 2013) [ an enhanced version of this opinion is available to lexis.com subscribers ]. Issue Addressed : Whether a complaint that fails to plead that demand was made on the Board and fails to plead...

High Court to Determine Whether Presuit Demand Was Necessary in Securities Suit

WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on June 24 agreed to hear an appeal of a First Circuit U.S. Court of Appeals ruling in a shareholder derivative lawsuit and determine whether the Circuit Court abused its discretion in determining that shareholders had properly shown that demand...

High Court To Determine Whether Presuit Demand Was Necessary In Securities Lawsuit

WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on June 24 agreed to hear an appeal of a First Circuit U.S. Court of Appeals ruling in a shareholder derivative lawsuit and determine whether the Circuit Court abused its discretion in determining that shareholders had properly shown that demand...

In re Trados: What Happens When Common Gets Nothing?

On August 16, Delaware Chancery Court Vice Chancellor Laster issued his highly anticipated, post-trial decision in In re Trados Incorporated Shareholder Litigation , C.A. No. 1512-VC (August 16, 2013) [ an enhanced version of this opinion is available to lexis.com subscribers ], where the directors who...

No Fraud Exception for Countrywide Litigation

The Delaware Supreme Court just issued its opinion in response to a certified question posed to it by the Ninth Circuit in the Countrywide shareholder litigation. The question posed to the court: Whether, under the “fraud exception” to Delaware’s continuous ownership rule, shareholder...

Target Directors and Officers Hit with Derivative Suits Based on Data Breach

I have frequently noted that among the many exposures a company experiencing a data breach could encounter is the possibility of a shareholder suit alleging that the company’s board breached their fiduciary duties by failing to take sufficient steps to protect the company from a breach and its...

Business Court Dismisses Derivative Action Against Duke Energy

You might remember the derivative action filed against the board of directors of Duke Energy Corporation stemming from its 2012 merger with Progress Energy. It received a lot of publicity . The merger was concluded long ago, but there's finally been a ruling from the Business Court dismissing the...

Wyndham Worldwide Board Hit with Cyber Breach-Related Derivative Lawsuit

In what is the latest example of the potential cybersecurity-related liability of corporate boards, a shareholder for Wyndham Worldwide Corporation has initiated a derivative lawsuit against certain directors and officers of the company, as well as against the company itself as nominal defendant, related...

The NC Business Court Rules on Recovering Attorneys' Fees in a Derivative Action Against an LLC

In this week's opinion in Ekren v. K&E Real Estate Investments , 2014 NCBC 56 , Judge Bledsoe outlined how a derivative action plaintiff can recover attorneys' fees [ an enhanced version of this opinion is available to lexis.com subscribers ]. What Constitutes A 'Substantial Benefit"...

Largest Derivative Lawsuit Settlements

My post earlier this week about the $275 million Activision Blizzard shareholder derivative lawsuit settlement – and in particular my suggestion that the Activision settlement may be the largest derivative suit settlement ever – provoked an interesting flurry of emails and conversations about...

Cornerstone Research Releases 2014 M&A Litigation Report

According to the latest report from Cornerstone Research, during 2014, over 90 percent of M&A transactions resulting in at least one lawsuit, but each deal attracted a smaller average number of lawsuits and in fewer jurisdictions than in past years. The report, entitled “Shareholder Litigation...

Data Breach-Related Derivative Lawsuit Filed against Home Depot Directors and Officers

In early 2014, when plaintiffs initiated data breach-related derivative lawsuits against the boards of Target Corp. ( here ) and Wyndham Worldwide ( here ), there was some speculation that these cases might be the first of what could become a wave of data-breach related D&O lawsuits. But then the...

Volkswagen Vehicle Emissions Scandal Triggers U.S. Securities Suit, Dutch Collective Action Initiative

The news that Volkswagen employed sophisticated software-based “defeat devices” in order to permit a number of its diesel-engine models to appear to meet U.S. emissions standards has dominated the headlines in the business pages over the last few days. The news has already led to the resignation...