News & Analysis as of

Breach of Duty Corporate Misconduct

Allen Matkins

Unreasonableness Or Carelessness Is Insufficient To Prove Liability In Nevada

Allen Matkins on

Nevada's exculpatory statute, NRS 78.138(7), requires a plaintiff to both rebut a statutory presumption of good faith and prove a breach of fiduciary duty involving intentional misconduct, fraud, or a knowing violation of the...more

Gray Reed

Scribner’s Error: A Cautionary Tale of Oil & Gas Fraud

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DALF Energy, LLC v. GS Oilfield Services addresses a fiduciary’s deceptive actions in oil and gas transactions. The Fifth Circuit held: self-dealing may constitute a breach of fiduciary duty even when the principal is...more

Fox Rothschild LLP

A Corporate “One Man Band” Might be a Lonely Road, but the Company is Not Always a Puppet

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Matthew Bagley worked for a claims adjustment firm in Louisiana as its claims manager for nearly three years before resigning to, allegedly, improperly compete against his former employer, M.D. Claims Group. In M.D. Claims...more

King & Spalding

Delaware Chancery Court Rules that Creditor Aided and Abetted a Breach of the Fiduciary Duty of Loyalty

King & Spalding on

On November 15, 2024, the Delaware Chancery Court ruled that a creditor aided and abetted a breach of fiduciary duty. The lawsuit came after Versa Capital Management LLC bought debt owed by BridgeStreet Worldwide, Inc., with...more

Freiberger Haber LLP

The Absence of a Single Statute of Limitations for Breach of Fiduciary Duty Claims

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In New York, litigants often grapple with the appropriate limitation period to apply to breach of fiduciary claims. There is no single statute of limitations that the courts and the parties can look to. “Rather, the choice of...more

Balch & Bingham LLP

In ‘Case’ You Missed It: Alabama Supreme Court issues opinion clarifying the rules controlling nonprofit corporation governance

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If you have ever been to the Flora-Bama, chances are you have passed by the Caribe Resort in Orange Beach, AL. The Caribe, like many beach resorts, is a condominium building containing individually owned residential units...more

Hicks Johnson

SCOTX Ruling Confirms Individual Liability for Corporate Owners Who Commit Torts

Hicks Johnson on

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

Allen Matkins

When Dismissing A Case Violates Due Process

Allen Matkins on

When a shareholder sues derivatively, the shareholder is seeking relief not for itself, but for the corporation.  Therefore, it should be expected that the shareholder is not free to compromise or dismiss the suit absent...more

Walkers

Shades of grey? Unfair prejudice and derivative actions in Jersey following Ntzegkoutanis v Kimionis

Walkers on

Matters of law will certainly not always be black and white, however, the Courts have adopted a traditional approach when assessing matters of mismanagement or misconduct by directors in relation to company – if there is...more

Allen Matkins

Do Corporate Boards Necessarily Breach Their Fiduciary Duties When They Approve Illegal Conduct?

Allen Matkins on

In a recent blog post on the Business Law Prof Blog, Tulane Law professor Ann M. Lipton opined...more

StoneTurn

Meeting DOJ and SEC Post-Settlement Obligations: A Practical Guide

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No Longer Just a Matter of Paying the Fine and Moving On. Corporate settlement agreements used to be straightforward—pay the penalty and move on. Now, these resolutions rival complex business transactions, including...more

Adams & Reese

Ask Not for Whom the Blue Bell Tolls

Adams & Reese on

Fifth Circuit Ruling Against Blue Bell’s Corporate Directors and Officers May Limit Availability of Insurance Coverage in Shareholder Derivative Actions - In a recent ruling, the United States Court of Appeals for the...more

Skadden, Arps, Slate, Meagher & Flom LLP

The Court of Chancery Holds That Corporate Officers, Like Directors, Owe a Duty of Oversight

On January 25, 2023, Vice Chancellor Laster of the Court of Chancery issued a significant decision, finding as a matter of first impression that corporate officers owe a duty of oversight akin to the oversight duties owed by...more

Paul Hastings LLP

Delaware Court of Chancery Dismisses Duty of Oversight and Care Claims Against Directors

Paul Hastings LLP on

In our February 14, 2023 Stay Current, we discussed a Delaware Court of Chancery decision allowing shareholder derivative claims to proceed against a corporate officer for alleged oversight duty failures stemming from...more

A&O Shearman

Delaware Court Of Chancery Denies Motion To Dismiss Breach Of Fiduciary Duty Claim Against Director Who Abstained From Merger Vote

A&O Shearman on

On May 25, 2022, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery denied a motion to dismiss a stockholder derivative claim against a director of Fat Brands Inc. (the “Corporation”) for alleged breach of...more

A&O Shearman

Delaware Court Of Chancery Dismisses Derivative Claims Challenging A Convertible Debt Issuance At The Onset Of The COVID-19...

A&O Shearman on

On November 23, 2021, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery dismissed stockholder derivative claims for breach of fiduciary duty against the directors of Wayfair, Inc. (the “Company”). ...more

Proskauer - Whistleblower Defense

July 2021 Update of the SEC’s Covered Actions for Potential Whistleblower Claims

On July 30, 2021, the SEC posted 14 Notices of Covered Actions, after which individuals have 90 calendar days to apply for a whistleblower award.  As discussed in our prior post, the SEC publishes these Notices for cases in...more

Farrell Fritz, P.C.

Court Rejects Oppressed Shareholder’s Bid for Dissolution or Buy-Out, Finds Money Damages Sufficient

Farrell Fritz, P.C. on

A minority shareholder petitioning for dissolution under BCL § 1104-a must establish, by a preponderance of the evidence, that the majority shareholders have engaged in “illegal, fraudulent or oppressive actions,” (BCL §...more

Vinson & Elkins LLP

When The Smooth CEO Exit Gets Bumpy

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Recent press reports have highlighted the difficulties faced by companies that discover evidence of misconduct only after an executive has exited and received severance. When it comes time to exit a CEO or other senior...more

White and Williams LLP

Delaware Stockholders Need Only Present Reasonable Inference of Managerial Wrongdoing for Inspection of Company’s Records

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Section 220 of the Delaware General Corporation Law affords stockholders a qualified right to inspect a corporation's books and records. A Section 220 inspection is a powerful stockholder right, and indeed, the Delaware...more

The Volkov Law Group

Board Members Should Take Note — Delaware Supreme Court Issues Important Decision on Caremark Compliance Standard

The Volkov Law Group on

I have long predicted that corporate board members are in for a rude awakening. Corporate boards have to improve their ability and knowledge surrounding supervision and monitoring of a company’s ethics and compliance...more

Skadden, Arps, Slate, Meagher & Flom LLP

Skadden's 2019 Insights: Expanding Theories of Liability in the #MeToo Era

Alleged workplace harassment is not a new phenomenon, but in the wake of allegations of sexual misconduct in the corporate context, plaintiffs increasingly are targeting an expanded group of defendants, including public...more

Farrell Fritz, P.C.

Judicial Dissolution Proceeding against Donald J. Trump Foundation Withstands Dismissal Motion

Farrell Fritz, P.C. on

The Donald J. Trump Foundation, a private foundation incorporated in 1987, was formed “exclusively for charitable, religious, scientific, literary or educational purposes”, and as stated in the Certificate of Incorporation,...more

White and Williams LLP

Delaware Superior Court Applies “Capacity” Exclusion to Deny Coverage Under D&O Policy

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In Goggin v. National Union Fire Insurance Company of Pittsburgh, PA, the Delaware Superior Court denied the insured directors’ motion for judgment on the pleadings after construing an exclusion in the applicable D&O...more

Skadden, Arps, Slate, Meagher & Flom LLP

Corwin Doctrine Ruled Inapplicable in Section 220 Litigation

Since the Delaware Supreme Court decided Corwin v. KKR Financial Holdings LLC more than two years ago, there has been an open question as to whether and to what extent the principles affirmed in that decision apply in the...more

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