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Dilution › Fiduciary Duty

Cooley LLP

In Rare Dismissal of Up-C Reorganization Case, Chancery Court Holds That Claim Is Derivative, Not Direct 

Cooley LLP on

On April 10, 2025, the Delaware Court of Chancery granted a motion to dismiss in a breach of fiduciary duty action arising from BGC’s conversion from an Up-C corporation to a traditional full C corporation. While multiple...more

Holland & Knight LLP

Arkansas Court Declines to Dismiss Challenge to ESOP Releveraging Transaction

Holland & Knight LLP on

The U.S. District Court for the Western District of Arkansas issued its written decision in Shipp v. Central States Manufacturing, Inc. on July 5, 2024, declining to dismiss the case against Central States Manufacturing Inc....more

Farrell Fritz, P.C.

Let’s Talk About Dilution

Farrell Fritz, P.C. on

When a closely-held business is profitable, self-interested owners naturally want a bigger slice of the pie, especially where the personal relationships among the owners are frayed.  Perhaps that’s why we often discuss the...more

Robson & Robson, P.C.

The Hazards of 'Weaponizing' Capital Call and Dilution Provisions

Robson & Robson, P.C. on

There are many ways that an owner of a closely-held business can use their superior financial resources to gain an advantage over their co-owners in a dispute. One common way is the use of a capital call provision to dilute...more

Hogan Lovells

Brookfield Asset Management Inc. v. Rosson: Gentile overturned, eliminating dual-natured claims

Hogan Lovells on

In Brookfield Asset Management Inc. v. Rosson, the Delaware Supreme Court unanimously overturned its 2006 decision in Gentile v. Rossette, thereby eliminating the dual nature “Gentile carve-out” that allowed for both direct...more

Fenwick & West LLP

Delaware Supreme Court Holds That Dilution Claims Against a Controller Are Solely Derivative, Overruling Prior Precedent

Fenwick & West LLP on

On September 20, 2021, the Delaware Supreme Court took the highly unusual step of overruling its prior decision in Gentile v. Rossette. An oft-criticized precedent from 2006, Gentile created an exception allowing minority...more

Gray Reed

Compelling Justification Required when Interfering with Stockholder Voting Rights

Gray Reed on

The Coster v. UIP Companies, Inc. decision provides a framework for evaluating stockholder disenfranchisement claims.  Directors should carefully consider how, and under what conditions, they will take actions that dilute...more

Faegre Drinker Biddle & Reath LLP

Minnesota Court of Appeals Articulates Test for Direct Shareholder Claims in In re Medtronic, Inc. Shareholder Litigation

Faegre Drinker Biddle & Reath LLP on

On January 25, 2016, the Minnesota Court of Appeals decided In re Medtronic, Inc. Shareholder Litigation, holding that a shareholder’s claim is properly characterized as a direct claim, not a derivative claim, even where all...more

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