Main Menu

Court Of Chancery Explains The Gentile Doctrine

In re Nine Systems Corporation Shareholders Litigation, C.A. 3940-VCN (February 28, 2013)

When is a claim that stockholders were wrongly diluted by the issuance of stock a derivative claim and not a direct claim?  Under the Gentile rule, such a claim is derivative unless the dilution was done to benefit a controlling stockholder of a control group.  Determining when several stockholders constitute a "group" for this purpose is not easy.  Just acting together is not enough. This decision explains what else is required, such as acting to carry out a preconceived goal.

Share

awards

  • US News Best Law Firms
  • JD Supra Readers Choice Award
  • Delaware Today Top Lawyers
  • Super Lawyers
Back to Page