News & Analysis as of

Breach of Contract Shareholder Litigation

Alston & Bird

Exit Means Exit: Lessons in Directors’ Duties, Unfair Prejudice, and Good-Faith Obligations Under English Law

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Our Financial Services Litigation Group examines an English Court of Appeal decision that highlights the need for company directors to fully understand and abide by the exit provisions in their shareholders’ agreements under...more

Patterson Belknap Webb & Tyler LLP

Justices to Consider Whether Section 47(b) of the Investment Company Act Creates a Federal Cause of Action

In its October 2025 Term, the Supreme Court will decide whether Section 47(b) of the Investment Company Act of 1940 (“ICA”) creates a federal cause of action for private plaintiffs seeking rescission of contracts that are...more

Alston & Bird

Class Action & MDL Roundup | 2025 Q1 – Our Terms Define Class

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Welcome back to the Class Action & MDL Roundup! This edition covers notable class actions from the first quarter of 2025. In this edition, two UK actions fail to clear a low bar, a movie isn’t a video, and spam isn’t...more

Cadwalader, Wickersham & Taft LLP

Delaware Chancery Court Finds Private Equity Majority Owner Not Liable to Minority Investors Where LLC Agreement Waived Fiduciary...

In a recent decision, the Delaware Court of Chancery dismissed breach of fiduciary duty claims asserted by minority unitholders in connection with the acquisition of CityMD by VillageMD.  In Kahn, et al. v. Warburg Pincus, et...more

Vinson & Elkins LLP

Delaware Court of Chancery Dismisses Claims Relating to Sale of Company Against Private Equity Majority Owner

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In the latest instance of a private equity seller vindicating contractual rights in the Delaware Court of Chancery, on April 30, Vice Chancellor Lori W. Will rejected attempts by minority LLC members in urgent care provider...more

Mayer Brown

Delaware Law Alert: Chancery Court Dismisses Challenge to Elimination of Tag-Along Rights in Private Equity-Backed Healthcare...

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A recent Delaware Chancery Court decision provides important guidance for private equity sponsors, minority investors, and deal professionals regarding the enforceability of contractual waivers and the limits of the implied...more

Morris James LLP

Chancery Finds that the Plaintiff Successfully Pled Breach of Contract for Milestone Payments

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Medal v. Beckett Collectibles, LLC, C.A. No. 2023-0984-VLM (Del. Ch. Aug. 22, 2024). In denying a motion to dismiss, the Court of Chancery held that the plaintiff pled reasonably conceivable claims for breach of...more

Hicks Johnson

SCOTX Ruling Confirms Individual Liability for Corporate Owners Who Commit Torts

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In Texas, as most other states, it is long settled that corporate agents are personally liable for their own tortious or fraudulent conduct—even if the conduct was done in their capacity as a corporate agent. Section 21.223...more

Morris James LLP

Court of Chancery Dismisses Aiding And Abetting Fraud Claim Against Corporate Officers And Directors On Grounds That A Corporation...

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Urvan v. AMMO, Inc., Consol. C.A. No. 2023-0470 PRW (Del. Ch. Feb. 27, 2024, corrected Mar. 14, 2024) - It is an axiom of Delaware law that a corporation acts through its human agents. This principle informs the causes of...more

Morris James LLP

Chancery Finds that Buyer Breached Purchase Agreement by Denying Sellers’ Rights to Participate in a Defense

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LPPAS Representative, LLC v. ATH Holding Co. LLC, C.A. 2020-0241-KSJM / Shareholder Representative Services LLC v. ATH Holding Co. LLC, C.A. No. 2020-0443-KSJM (Del. Ch. May 2, 2023) - Delaware law recognizes parties’...more

Goodwin

“Good Faith” in Shareholders’ Agreements: What Does it Mean?

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Shareholder agreements often include an obligation that the shareholders must act with “good faith” in their dealings with one another and with the company. However, what does that actually mean? In this insight, we consider...more

Hendershot Cowart P.C.

Shareholder Actions: Direct Vs. Derivative Suits

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When it comes to protecting their interests – or the interests of the corporation – shareholders have unique rights to take legal action. They can file suit either on behalf of the corporation itself, known as a derivative...more

A&O Shearman

Keeping the Faith: English Court of Appeal Considers Contractual Good Faith Provision in Shareholder Agreement

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The English law concerning contractual duties of good faith (express and implied) has received considerable judicial attention in recent years. It will therefore be of interest to those who use English law contracts,...more

Goodwin

Delaware Chancery Court Clears Musk of Breach of Fiduciary Duty Claim

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On April 27, 2022, the Delaware Court of Chancery in In re Tesla Motors Stockholder Litigation rendered a post-trial verdict finding for Elon Musk, co-founder and CEO of Tesla Motors, Inc., on claims that Musk breached his...more

Hogan Lovells

Q4 2021 Quarterly Corporate / M&A decisions updates

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Below is our Corporate / M&A decisions update covering decisions in the fourth quarter of 2021. This update is designed to highlight selected important M&A, corporate, and commercial court decisions on a quarterly basis....more

Morris James LLP

Chancery Denies Motion to Dismiss Claim for Breach of Earn-Out When Unable to “Divine any Meaning” From Provision

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Western Standard, LLC v. SourceHOV Holdings, Inc., C.A. No. 2018-0280-JRS (Del. Ch. July 24, 2019). Defendant Pangea acquired BancTec through a merger agreement that provided for an earn-out to former BancTec stockholders...more

Morris James LLP

Superior Court Complex Commercial Litigation Division Holds Settlements Arising out of Dole Stockholder Litigations Constitute...

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Arch Insurance Co. v. Murdock, C.A. No. N16C-01-104 (EMD)(CCLD) (Del. Super. May 7, 2019). After trial and an adverse judgment in the amount for $148 million for breach of the duty of loyalty in a going private merger In...more

A&O Shearman

Delaware Court Of Chancery Denies Motion To Dismiss Breach Of Contract Claim For Failure To Use "Commercially Reasonable Efforts"...

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On December 28, 2018, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery declined to dismiss a breach of contract claim brought by former stockholders of Ception Therapeutics, Inc. (“Ception”) against...more

Morris James LLP

Court of Chancery Addresses the Scope of Summary Control Disputes and Effectiveness of Written Consents

Morris James LLP on

Brown v. Kellar, C.A. No. 2018-0687-MTZ (Del. Ch. Dec. 21, 2018) - Control disputes, like those under Section 225 of the DGCL, are summary, narrow proceedings limited to the issues regarding title to office. The Court of...more

Hogan Lovells

An intro to claims and damages in M&A litigation

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We’ve asked lawyers from our offices in Spain, France, Germany, the Netherlands, and the U.S. to give us an overview of what to expect in M&A litigation....more

A&O Shearman

Finding Merger Agreement Provisions Regarding Milestone Payments Ambiguous, Delaware Court Of Chancery Denies Dismissal Of...

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On August 10, 2018, Vice Chancellor Joseph R. Slights III of the Delaware Court of Chancery denied a motion to dismiss breach of contract claims stemming from a merger agreement pursuant to which defendant, Stora Enso AB,...more

Morris James LLP

Delaware Superior Court Upholds Coverage For Fraud Claim

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Arch Insurance Company v. Murdock, C.A. N16C-01-104 EMD CCLD (March 1, 2018) - This decision upholds coverage under a D&O policy for a claim alleging fraud by directors. This is not too surprising as the Delaware...more

Bass, Berry & Sims PLC

Chris Lazarini Analyzes "Common and Usual Meaning" Interpretation of Insurance Contracts

Bass, Berry & Sims attorney Chris Lazarini analyzed a case in which UBS Puerto Rico sought to overcome its insurance carriers' refusal to defend and provide coverage for two civil actions, settlements with the SEC and FINRA...more

Cadwalader, Wickersham & Taft LLP

Contracting Party Beware: The Implied Covenant Will Not Save You From Your Agreement If You Negotiated Away Your Rights

On February 1, 2018, the Delaware Court of Chancery granted defendants’ motion to dismiss an action brought by minority unitholders of Trumpet Search, LLC (“Trumpet” or the “Company”). The defendants were other unitholders...more

Farrell Fritz, P.C.

Finding No “Therapeutic” Benefit to Corporation, Court Denies Fee Award in Discontinued Shareholder Derivative Action

Farrell Fritz, P.C. on

At first glance, you might think the plaintiff minority shareholder in Sardis v Sardis, 2017 NY Slip Op 27163 [Sup Ct Suffolk County May 11, 2017], achieved her derivative lawsuit’s goal when the defendant controlling...more

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