Barnaby Grzaslewicz on Derivative Suit

Chancery Finds that Would-Be Caremark Plaintiffs Failed to Plead Demand Futility

Bricklayers Pension Fund of W. Pa. v. Brinkley, C.A. No. 2022-1118-MTZ (Del. Ch. July 12, 2024) - In derivative cases where a stockholder-plaintiff has not made a pre-suit demand on the board of directors, demand futility...more

12/19/2024 / Board of Directors , Breach of Duty , Demand Futility , Derivative Suit , Fiduciary Duty , Shareholder Litigation , Shareholders

Delaware Supreme Court Reverses MFW Dismissal Due to Inadequate Disclosures Regarding Special Committee’s Advisors’ Material...

City of Sarasota Firefighters’ Pension Fund v. Inovalon Holdings Inc., No. 305, 2023 (Del. May 1, 2024). The Delaware Supreme Court’s decision in Khan v. M & F Worldwide Corp. (“MFW”) established a cleansing process for a...more

9/9/2024 / Board of Directors , Breach of Duty , Derivative Suit , Fiduciary Duty , Mergers , Shareholder Litigation , Shareholders

Chancery Declines to Modify Status Quo Order to Allow Partial Performance of Pending Settlement

In re AMC Entertainment Holdings, Inc. Stockholder Litigation, Consol. C.A. No. 2023-0215-MTZ (Del. Ch. Apr. 5, 2023) - In various contexts, upon request or stipulation, the Court of Chancery will impose status quo orders,...more

8/2/2023 / Class Action , Derivative Suit , Shareholder Litigation , Shareholders

Chancery Examines Director’s Personal Ties and Dismisses Duty of Loyalty Claim

In re Orbit/FR, Inc. S’holders Litig., C.A. No. 2018-0340-SG (Jan. 24, 2023) - This decision involved a stockholder challenge to a merger between Orbit and its controller, Microwave Vision....more

5/4/2023 / Board of Directors , Breach of Duty , Derivative Suit , Fiduciary Duty , Shareholder Litigation , Shareholders

Chancery Sustains Fiduciary Duty Claims Arising From Option Grants At Pandemic-Low Price

Knight v. Miller, C.A. No. 2021-0581-SG (Del. Ch. Apr. 27, 2022) - In mid-March 2020, at a time when the COVID-19 pandemic caused the corporation’s stock price to trade at a periodic low, the corporation’s compensation...more

8/26/2022 / Board of Directors , Breach of Duty , Derivative Suit , Fiduciary Duty

Chancery Dismisses Derivative Claims That Private Equity Sponsors Comprised A Control Group

Patel v. Duncan, C.A. No. 2020-0418-MTZ (Del. Ch. Sept. 30, 2021) - For stockholders to comprise a control group, the alleged group members must be connected in some “legally significant way – such as by contract, common...more

11/18/2021 / Board of Directors , Breach of Duty , Demand Futility , Derivative Suit , Fiduciary Duty , Shareholders

Chancery Dismisses Conclusory Allegations of Gross Negligence and Disloyalty Against Oracle Officers and Directors Related to...

In re Oracle Corp. Derv. Litig., C.A. No. 2017-0337-SG (Del. Ch. June 21, 2021) - While Delaware maintains a notice pleading standard, this decision reflects that conclusory allegations of breach of fiduciary duty leveled...more

8/17/2021 / Board of Directors , Breach of Duty , Derivative Suit , Fiduciary Duty , Motion to Dismiss

Chancery Reasons That Board’s Decision To Address Alleged “Red Flags” Related To Pending Litigation, After Litigation Is Resolved,...

Pettry v. Smith et al., C.A. No. 2019-0796-JRS (Del. Ch. June 28, 2021) - As discussed in Caremark and its progeny, fiduciary duties require directors to monitor the business and affairs of a corporation. Here, the Court...more

7/13/2021 / Board of Directors , Breach of Duty , Caremark claim , Demand Futility , Derivative Suit , Fiduciary Duty

Stockholders Lack Derivative Standing to Challenge Transactions Whose Terms Were Set Before They Became Stockholders

In re SmileDirectClub, Inc., 2021 WL 2182827 (Del. Ch. May 28, 2021) - Under the “contemporaneous ownership rule,” to have standing to bring derivative claims, stockholders in a Delaware corporation must own stock at the...more

6/23/2021 / Board of Directors , Breach of Duty , Derivative Suit , Fiduciary Duty , Shareholder Litigation , Shareholders

Chancery Confirms the Challenges in Pleading Caremark and Non-Shareholder Action Disclosure Claims

Fisher v. Sanborn, C.A. No. 2019-0631-AGB (Del. Ch. Mar. 30, 2021) - Under Court of Chancery Rule 23.1, a plaintiff attempting to bring a derivative action on behalf of a corporation faces a heightened “particularized”...more

4/27/2021 / Board of Directors , Breach of Duty , Caremark claim , Demand Futility , Derivative Suit , Fiduciary Duty , Shareholders

Barnaby Grzaslewicz

Morris James LLP

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