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Delaware law provides parties with significant flexibility to restrict or eliminate fiduciary duties in LLC agreements.  Sophisticated parties regularly take advantage of this flexibility by eliminating fiduciary duties of members and directors of LLCs.  These same parties, however, often choose not to extend these waivers to officers of the LLCs, often stemming from a desire to ensure that officers still have a fiduciary duty to be loyal to the LLC.  A new ruling from the Delaware Court of Chancery highlights the unintended consequences of excluding officers from the scope of the fiduciary duty waiver.Continue Reading New Delaware Ruling Highlights Unintended Consequences of Excluding Officers from Fiduciary Duty Waivers

Much has been written lately about a circuit split on the question whether a company’s forum selection bylaw mandating shareholder derivative lawsuits be brought in Delaware state court trumps a federal lawsuit asserting a derivative claim under Section 14(a) of the Securities Exchange Act of 1934 (which can only be asserted – if at all – in federal court).  The Seventh Circuit answered this question “no”[1] while the Ninth Circuit sitting en banc answered “yes,”[2] in both cases over vigorous dissents.  Many have speculated that the U.S. Supreme Court may weigh in to resolve this clear circuit split.Continue Reading Bringing an End to “Derivative” Section 14(a) Claims – Without Waiting for the Supreme Court to Weigh In

On February 9, 2023, NGO ClientEarth sued all eleven members of the board of directors of Shell plc before the English High Court, for allegedly failing to take steps to protect Shell against climate-change-related risks (see our alert memorandum of February 22, 2023). Our follow-up alert memorandum of April 17, 2023, also set out some answers to some common questions on derivative claims in the context of ESG litigation.Continue Reading Derivative Claim Against Shell’s Board by Climate-Change Activist Shareholder is Refused Permission to Proceed

On May 1, 2023, the Delaware Court of Chancery addressed an unsettled question under Delaware law—whether a fully informed, uncoerced vote of disinterested stockholders (so-called “Corwin cleansing”[1]) can be applied to defeat claims to enjoin defensive measures under Unocal Corp. v. Mesa Petroleum Co.Continue Reading Corwin Cleansing Denied In Action For Post-Closing Injunctive Relief Under Unocal

The litigation recently launched in England by the NGO, ClientEarth, against the members of the board of directors of Shell plc has generated a significant level of interest from organisations who wish to understand the implications for directors more generally.  The claim raises novel issues regarding directors’ responsibilities for a company’s environmental impact, and questions about how environmental obligations should be implemented and enforced.Continue Reading ESG Litigation: Derivative Claims Against Directors: Q&A

Last year we noted that U.S. antitrust enforcement was in a period of nearly unprecedented public attention and policy debate, and also that the Biden Administration seemed likely to launch significant new policy initiatives as the year progressed. …
Continue Reading 2023 Update: U.S. Antitrust Sets Sail into Uncharted Seas

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2023”.

In a recent survey of almost 2,800 global organizations, one in five respondents reported experiencing a ransomware attack in 2021—with almost half of those respondents suffering significant operational impacts as a result.…