You are here: / / ALTHOUGH THE COMPLAINT BY SHAREHOLDERS AGAINST DIRECTORS DID NOT SUFFICIENTLY...
,

ALTHOUGH THE COMPLAINT BY SHAREHOLDERS AGAINST DIRECTORS DID NOT SUFFICIENTLY ALLEGE THE BREACH OF A FIDUCIARY DUTY, IT DID ALLEGE A BREACH OF THE SUFFICIENT INFORMATION DUTY (FIRST DEPT).

The First Department, modifying Supreme Court, determined that, although it did not sufficiently allege the breach of a fiduciary duty, the complaint by shareholders alleged the breach of the “sufficient information duty” owed to shareholders by the directors:

The complaint … fails to allege “a special factual relationship between the directors and the shareholders … bring[ing] the directors of the company into direct and close contact with the shareholders in a manner capable of generating fiduciary obligations” with regard to either the dividend policy that is the subject of the third cause of action or the merger transaction that is the subject of the fourth cause of action … .

However, to the extent the director defendants gave shareholders an information statement providing information and recommendations about the merger transaction, they owed the shareholders a “sufficient information duty” … . This is not a duty of loyalty, which would require the directors to subordinate their interests to the shareholders’ interests, but “if [the directors] are going to invite the shareholders to a meeting, common fairness requires that they explain what the purpose of the meeting is” in a “clear and comprehensible” manner … .

The complaint alleges that the information statement failed to disclose that two directors on the special committee negotiating merger terms had ties to the investor defendants, who proposed the merger, that it failed to disclose any details about the search for alternate proposals, which was illusory, that it failed to provide a meaningful valuation of ordinary shares using industry standards for the insurance business, and that it failed to disclose the impact on the stock value of a parallel bond transaction. Moreover, the complaint alleges that, while the information statement warned that the investor defendants could wipe out the ordinary shareholders by redeeming their convertible cumulative preferred participating shares, it misrepresented the likelihood of that occurrence. Davis v Scottish Re Group Ltd., 2018 NY Slip Op 01867, First Dept 3-20-18

CORPORATION LAW (ALTHOUGH THE COMPLAINT BY SHAREHOLDERS AGAINST DIRECTORS DID NOT SUFFICIENTLY ALLEGE THE BREACH OF A FIDUCIARY DUTY, IT DID ALLEGE A BREACH OF THE SUFFICIENT INFORMATION DUTY (FIRST DEPT))/SHAREHOLDERS (CORPORATION LAW, ALTHOUGH THE COMPLAINT BY SHAREHOLDERS AGAINST DIRECTORS DID NOT SUFFICIENTLY ALLEGE THE BREACH OF A FIDUCIARY DUTY, IT DID ALLEGE A BREACH OF THE SUFFICIENT INFORMATION DUTY (FIRST DEPT))/DIRECTORS (CORPORATION LAW, ALTHOUGH THE COMPLAINT BY SHAREHOLDERS AGAINST DIRECTORS DID NOT SUFFICIENTLY ALLEGE THE BREACH OF A FIDUCIARY DUTY, IT DID ALLEGE A BREACH OF THE SUFFICIENT INFORMATION DUTY (FIRST DEPT))/SUFFICIENT INFORMATION DUTY (CORPORATION LAW, ALTHOUGH THE COMPLAINT BY SHAREHOLDERS AGAINST DIRECTORS DID NOT SUFFICIENTLY ALLEGE THE BREACH OF A FIDUCIARY DUTY, IT DID ALLEGE A BREACH OF THE SUFFICIENT INFORMATION DUTY (FIRST DEPT))

You might also like
“John Doe” Party Who Was Not Served Waived Objection to Personal Jurisdiction
QUESTION OF FACT WHETHER PLAINTFF SLIPPED AND FELL ON ICE OR SNOW IN AN AREA WHICH HAD BEEN CLEARED SUCH THAT IT CONSTITUTED A “PASSAGEWAY” WITHIN THE MEANING OF THE INDUSTRIAL CODE RE: THIS LABOR LAW 241(6) ACTION (FIRST DEPT).
SUIT SEEKING INDEMNIFICATION FOR A SETTLEMENT PAID TO DEFENDANT’S EMPLOYEE SHOULD NOT HAVE BEEN DISMISSED, RELEVANT LAW EXPLAINED (FIRST DEPT).
ALLEGED TORTIOUS ACTS DID NOT OCCUR IN NEW YORK, OUT OF STATE DEFENDANT DID NOT HAVE SUFFICIENT CONTACT WITH NEW YORK TO MEET DUE PROCESS STANDARDS, NO PERSONAL JURISDICTION (FIRST DEPT).
FURTHER DISCOVERY NECESSARY TO DETERMINE RELATIONSHIP BETWEEN SIGNATORIES AND NON-SIGNATORIES TO A CONTRACT WITH A FORUM SELECTION CLAUSE, IF THE RELATIONSHIP IS CLOSE ENOUGH, NON-SIGNATORIES WILL BE COVERED BY THE CLAUSE (FIRST DEPT).
THE TRIAL COURT PROPERLY PRECLUDED DEFENDANTS FROM CALLING PLAINTIFF’S TREATING PHYSICIANS AS WITNESSES IN THIS POLICE EXCESSIVE FORCE CASE BECAUSE OF INADEQUATE NOTICE AND THE TRIAL COURT PROPERLY ACCEPTED PLAINTIFF’S REDACTIONS OF THE MEDICAL RECORDS BECAUSE DEFENDANTS FAILED TO SUGGEST THEIR OWN REDACTIONS (FIRST DEPT).
ORDINANCE OR LAW ENDORSEMENT DID NOT REQUIRE INSURER TO PAY FOR REMEDIATION OF CODE VIOLATIONS NOT RELATED TO THE COVERED DAMAGE.
A CORPORATION DOES NOT OWE A FIDUCIARY DUTY TO ITS MEMBERS OR SHAREHOLDERS (FIRST DEPT).

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

Copyright © 2023 New York Appellate Digest, LLC
Site by CurlyHost | Privacy Policy

NO EVIDENTIARY SHOWING OF MERIT REQUIRED TO AMEND ANSWER, MOTION TO AMEND SHOULD... UNDER CAYMAN ISLANDS LAW, THE SHAREHOLDER’S DERIVATIVE CAUSES OF ACTION...