Justia Corporate Compliance Opinion Summaries

Plaintiffs sought a preliminary injunction against the acquisition of Compellant by Dell. The parties settled after significant discovery but before merits briefing or a hearing. The settlement consideration consisted of modifications to the deal protections in the merger agreement, including the rescission of a stockholder rights plan adopted in connection with the transaction, and six supplemental disclosures. Plaintiffs applied for a fee of $6 million and defendants argued for not more than $1.25 million. In addressing the fee application, and thus to estimate the value of the resulting benefits conferred by the settlement, the court relied primarily on four studies that measured market-wide rates of topping bid activity and the incremental value generated by multiple bidders. The court also evaluated the benefits conferred by the supplemental disclosures. In total, the court awarded $2.4 million. View "In re Compellent Technologies, Inc. Shareholder Litigation" on Justia Law

This action involved a challenge to a decision by the board of directors of a company to call certain of its outstanding shares. The purchasers of those shares claimed that the company called the shares at a below market price in violation of the express terms of the contracts governing the shares as well as the implied covenant of good faith and fair dealing. The company moved to dismiss the purchaser's complaint for failure to state a claim. The court found that the purchaser had alleged facts that conceivably would support a conclusion that the call price was set below fair market value and that the company acted in bad faith by setting the call price at that value. Therefore, the court denied the company's motion to dismiss. View "Clean Harbors, Inc. v. Safety-Kleen, Inc." on Justia Law

Appellant, a former shareholder in Wachovia, sought to recover personally for the decline in value of his shares of Wachovia stock during the recent financial crisis. The district court dismissed the suit, concluding that appellant's complaint stated a claim derivative of injury to the corporation and that he was therefore barred from bringing a direct or individual cause of action against defendants. The court held that because appellant's varied attempts to recast his derivative claim as individual were unavailing, the judgment of the district court was affirmed. View "Rivers, Jr. v. Wachovia Corp., et al." on Justia Law

The Wyoming Division of Banking performed a Wyoming Uniform Consumer Credit Code compliance examination of Onyx Acceptance Corporation and determined it was improperly charging its Wyoming customers fees for making payments by telephone or internet. The Division ordered Onyx to stop charging the fees and refund the fees collected. The Office of Administrative Hearings issued a recommended order granting summary judgment for the Division. Consistent with the recommended decision, the administrator of the Code issued an order finding that Onyx violated the Code when it charged the fees. The district court reversed, concluding that the fees were not covered by the Code and, therefore, Onyx did not violate the Code by charging them to customers who opted to pay by phone or internet. The Supreme Court affirmed, holding that Onyx did not violate the Code and summary judgment in its favor was appropriate. Remanded. View "Vogel v. Onyx Acceptance Corp." on Justia Law

A tax employee of defendant, terminated after reporting an alleged tax fraud scheme to the company and federal enforcement agencies, filed suit asserting claims under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(c) and 1962(d). The district court dismissed, finding that the predicate acts alleged were either unrelated or did not proximately cause plaintiff's injuries. The Seventh Circuit reversed. The retaliatory actions were related to the alleged tax fraud scheme, under the Supreme Court's "continuity plus relationship" test. Since enactment of the Sarbanes-Oxley Act, 18 U.S.C. 1513(e) retaliation against an employee constitutes racketeering. Retaliatory acts are inherently connected to the underlying wrongdoing exposed by the whistleblower, even though they occur after the coverup is exposed. In this case, the retaliatory acts were not isolated events, separate from the tax fraud. Plaintiff properly alleged that his termination was proximately caused by a RICO predicate act of retaliation. View "DeGuelle v. Camilli" on Justia Law

Plaintiffs commenced an action and moved for preliminary injunction seeking to enjoin defendants, the board of trustees, from demolishing a certain church building. At issue was whether section 5 of the Religious Corporations Law granted plaintiffs, former parishioners of the church incorporated as a religious corporation, the authority to challenge the board of trustees' decision to demolish the church. The court held that plaintiffs have no basis to challenge the actions properly voted upon by the board of trustees and sanctioned by the archbishop. Accordingly, the order of the Appellate Division was affirmed. View "Blaudziunas v Egan" on Justia Law

This action involved a challenge to the decision by a purchaser to terminate a share purchase agreement and related consulting services agreement based on the purchaser's contention that certain conditions precedent to closing those agreements had not been met by the seller. Purchaser brought an action for declaratory judgment and injunctive relief, seeking a determination that it properly terminated the share purchase and consulting services agreements and was entitled to the return of its down payment on the purchase price from escrow. The court found that the agreements between the parties unambiguously provided that the Development Fees were contingent on the commencement of actual development of the projects and that the purchaser was under no obligation to develop the projects. Therefore, the court granted purchaser's motion for partial summary judgment on that issue and held that seller was not entitled to any Development Fees as a result of purchaser's decision to terminate the transaction. View "Invenergy Solar Dev. LLC v. Gonergy Caribbean Sarl, et al." on Justia Law

Plaintiff was terminated as a partner of Deloitte LLP and Deloitte Tax LLP after he pled guilty to a criminal charge relating to allegedly stalking and harassing an ex-lover. Plaintiff claimed that Deloitte management wrongfully placed him on unpaid leave, recognized their error by reinstating his salary, yet continued to deny him his right to participate in the partnerships' business. The court granted summary judgment against plaintiff on the claim for breach of the partnership agreement; on his wrongful disassociation claim; on the implied covenant of good faith and fair dealing claim; on the Delaware Wage Payment and Collection Act claim; and on the breach of the duty of loyalty claim. The court also held that plaintiff's final complaint seeking specific performance was rendered moot when plaintiff was involuntarily terminated. Accordingly, defendants were entitled to summary judgment on all counts of the complaint. View "Klig v. Deloitte LLP, et al." on Justia Law

Plaintiff asserted wide-ranging claims against defendant and its managing member after plaintiff and defendant agreed to combine their investment management operations into a single firm. After coming to believe that defendant was engaged in fraud, plaintiff terminated the arrangement. In a formal termination agreement, plaintiff agreed to pay certain enumerated expenses and the parties granted each other expansive global releases. The court held that, on its face, the broad and unambiguous language of the General Release encompassed all of the claims asserted in the Complaint. Accordingly, defendant's motion to dismiss was granted. View "Seven Investments, LLC, et al. v. AD Capital, LLC, et al." on Justia Law

Dr. Carol Walker, a physician who sold nutritional supplements, filed a damage suit in the State Court of Gwinnet County against AmeriSciences and three of the company's corporate officers (appellants) under the Fair Business Act (FBPA), OCGA 10-1-399(b), for failure to disclose and comply with the repurchase requirements of the Sale of Business Opportunities Act (SBOA), OCGA 10-1-415(d)(1). On appeal, appellants contended that the Court of Appeals erred in failing to give res judicata effect to an earlier Texas declaratory judgment. The court held that Dr. Walker was barred by the Texas judgment from filing an FBPA claim against AmeriSciences in Georgia and a Georgia court could not make its own determination regarding whether the forum selection clause precluded the filing of an FBPA claim in Georgia. Also at issue was whether the State Court of Gwinnett County had personal jurisdiction over the individual defendants. The court held that because the "fiduciary shield" doctrine did not apply in Georgia, the allegations of the complaint were sufficient to withstand appellants' attack on the trial court's jurisdiction over the individual defendants on the ground that they acted in their corporate capacities. Appellants further contended that, even if the trial court had personal jurisdiction over the individual defendants, they could not be personally liable for violations of the SBOA because none of them was a "seller" within the meaning of OCGA 10-1-410(10). The court held that pursuant to OCGA 10-1-399(a) and 10-1-417(b), each individual defendant was subject to personal liability for any violation of the SBOA which he had committed and which was proved by Dr. Walker. View "Amerireach.com, LLC., et al. v. Walker" on Justia Law