Court Of Chancery Declines To Approve Derivative Settlement
Posted In Derivative Claims, Settlements
Stein v. Blankfein, C.A. 2017-0354-SG (October 23, 2018)
This is the rare decision that declines to approve the settlement of a derivative suit. The Court rejected the settlement because the proposed terms required the corporation, as a nominal defendant, to release breach of fiduciary duty claims against the director defendants in return for which those directors would agree to make disclosures already required by law. The Court viewed that agreeing to do what you had to do anyway as providing no real consideration for the release of the claims. This result illustrates the scrutiny the Court of Chancery applies to such settlements that affect corporate and stockholder rights.
Tags: Derivative Claims, SettlementShare