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Showing 83 posts in Class Actions.

Court Of Chancery Explains Equitable Tolling

Posted In Class Actions

In re Primedia Inc. Shareholders Litigation, C.A. 6511-VCL (December 20, 2013)

This decision explains when the doctrine of equitable tolling will save a complaint from being dismissed because it was filed too late.  If the plaintiff would not have been able to discover the key facts supporting a claim by inspecting the company's books and records, equitable tolling of the applicable limitations period will apply until those facts come to light. That is particularly helpful in a Brophy claim alleging the use of insider information where the knowledge of the insider may not become apparent until that insider's records are disclosed.

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Court Of Chancery Explains How To Calculate The Limitations Period When Class Is Not Certified

Posted In Class Actions

In Re Nine Systems Corporation Shareholders Litigation, C.A. 3940-VCN (July 31, 2013)

This decision explains how to determine if too much time has passed to permit a complaint to go forward, under a variety of circumstances.  It also discusses the various rules that may be applied when a class action is not certified but there is tolling while the class certification issue is pending.

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Court Of Chancery Sets Guidelines For Trades By Class Representatives

Posted In Class Actions

In re NYSE Euronext Shareholders Litigation, C.A. 8136-CS (Transcript March 8, 2013)

This transcript sets 2 guidelines that a class representative should follow with respect to trading in the securities held by the class it represents.  First, any trading should be first reviewed by class counsel to avoid problems with using insider information gained in the course of the litigation. Second, the class representative should retain at least 75% of the securities it held when the class was certified to be sure it continues to have the same economic interests that warranted its appointment to represent others.

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Court Of Chancery Explains Class Representative Qualifications

Posted In Class Actions

New Jersey Carpenters Pension Fund v. infoGROUP, Inc., C.A. 5334-VCN (February 13, 2013)

This decision is a good review of the qualifications needed to serve as a class representative. Particularly noteworthy is its holding that merely voting in favor of the merger under attack is not an automatic disqualification.  So too, the sale of the stock prior to the merger is not grounds for disqualifying a proposed class representative.

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Supreme Court Requires Opt Out Class Action

Posted In Class Actions

In re Celera Corporation Shareholder Litigation, No. 212, 2012 (December 27, 2012)

The Delaware Supreme Court has required opt out rights in a class action settlement.  The objector that wanted to opt out was a major stockholder, the claims being settled were only damage claims and the class representative had acted in a way that called into question if it had adequately represented the class. Thus, this decision may be an abnormality and opt out rights will still continue to be rarely granted.  But, we shall see.

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Court Of Chancery Applies Hirt Test

Posted In Class Actions

Coyne v. Catalyst Heath Solutions Inc., C.A. 7448-VCN (May 25, 2012)

This decision applies the familiar Hirt factors to decide who should be lead class counsel.  Note the slight preference for who has the most support among the various plaintiffs' firms.

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Court Of Chancery Explains "Acquiescence"

Posted In Class Actions, M&A

In re Celera Corporation Shareholder Litigation, C.A. 6304-VCP (March 23, 2012)

This is an important decision because it clarifies when a stockholder will be deemed to have acquiesced to a merger, thereby losing her right to continue to litigate.  In short, voting for the merger or accepting a tender offer is acquiescence.  Accepting the merger consideration when the merger is inevitable is not acquiescence.

This decision is also useful for its explanation of how the Court will calculate the fees to be awarded.

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Court Of Chancery Explains How To Apply Hirt

Posted In Class Actions
In re Delhi Financial Group Shareholder Litigation,  C.A. 7144-VCG (February 7, 2012) This decision teaches how to apply the so-called Hirt facts to select lead counsel in a class action. Most notably, it holds that filing first is not as important as filing the best complaint and that co-lead counsel may work in some cases. Share

Court Of Chancery Upholds No Trading Rule

Posted In Class Actions

Steinhardt v. Howard-Anderson,  C.A. 58787-VCL (January 6, 2012)

A class representative may not trade in the stock held by his class members based on information he learns in the litigation.  That is the usual rule reflected in the typical confidentiality order entered in such cases in Delaware.  This decision collects several other unreported decisions following that rule and shows how to calculate the trading profits that must be returned to the class when the rule is violated.

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Court Of Chancery Analyizes Class Conflicts

Posted In Class Actions

Garrett v. Zon Capital Partners LP,  C.A. 5607-CS (November 10, 2011)

This is a rare Court of Chancery decision discussing when a class should be certified. The Court reviewed and dismissed the claim that there was a conflict of interest among class members, based on a funds flow analysis.

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Court Of Chancery Explains Lead Counsel Selection Process

Posted In Class Actions

Nierenberg v CKx, Inc., C.A. 5545-CC (May 27, 2011)

This decision involves the application of the familiar standards governing the appointment of lead counsel, but with a twist.  When multiple suits are filed over the same alleged misdeed, the Court of Chancery has encouraged the litigants to file a so-called "Savitt Motion."  That motion asks the various courts involved to confer as to which case should go forward while the others are stayed. Here, when the New York court decided the Delaware case should be the one to proceed, the lead lawyer in New York agreed to drop his suit and go to Delaware with his claim. That drew praise from the Delaware court and may have tipped the balance in having that lawyer appointed lead counsel.

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Court Of Chancery Explains Class Certification Rules

Posted In Class Actions

In re Lawson Software Inc. Shareholder Litigation, C.A. 6443-VCN (May 27, 2011)

This decision explains in a clear way how the class certification process is to work and when the members of the class should receive more direct notice of the class action.

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Superior Court Refuses to Permit "Pick Off" Of Class Representative

Posted In Class Actions

Stratton v. American Independent Insurance Company, C.A. 082-12-12 JRS CCLD ( May 11, 2011)

In this unusual fact pattern, a defendant paid the class representative the most the representative might have received for himself if the class claim were won and then argued the class action was moot.  The Court disagreed and did a careful analysis of why the class action could proceed despite the defense effort to "pick off" the class representative.

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Court Of Chancery Explains Selection Of Lead Counsel

Posted In Class Actions

In re Del Monte Foods Company Shareholders Litigation, C.A. 6027-VCL (December 31, 2010)

This decision applies the so-called Hirt factors to select lead counsel and the lead plaintiff in class action litigation.  The size of the proposed lead plaintiff's stake in the company and the experience of its proposed lead counsel are given the greatest weight.

The care and expedition given to this decision are particularly noteworthy.

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Court Of Chancery Clarifies Rules On Class Action For Fraud Claims

Posted In Class Actions

Dubroff v. Wren Holdings LLC, C.A. 3940-VCN (August 20, 2010)

This decision clarifies when a class action may be brought arising out of a claim based on the duty of disclosure.  Briefly, when there was no request for the stockholders to vote [such as when they just receive notice of a completed corporate action], then a plaintiff must prove "reliance, loss causation and damages."   As those elements of the claim may vary for each individual plaintiff, a class action is inappropriate.  Delaware does not recognize the "fraud on the market" theory in those instances.

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