Posts in Class Actions

Court of Chancery Grants In Part Motion To Dismiss Class and Derivative Complaint

Khanna v. McMinn, C.A. No. 20545-NC, 2006 WL 1388749 (Del. Ch. May 9, 2006). Defendants moved to dismiss class and derivative complaint under Court of Chancery Rules 23.1 and 12(b)(6). Defendants also moved to disqualify the plaintiffs, to strike portions of the complaint and for continued sealing of the complaint. More › Share

Court of Chancery Imposes Class Certification with Hedge Fund as Class Representative

Regal Entertainment Group v. Amaranth LLC, C.A. No. 1226-N, 2006 WL 948257 (Del. Ch. Apr. 12, 2006). Plaintiff, Regal Entertainment Group, asked the Court of Chancery to grant its motion for certification of defendant class. Plaintiff is the issuer of a series of convertible notes under an indenture and defendant Amaranth is one of the largest holders of these notes. After a public dispute regarding Regal's method of calculating the number of shares of common stock upon conversion, Regal filed a lawsuit against Amaranth seeking a declaration that its calculation was correct. Amaranth counterclaimed that its calculation of conversion was correct. The only objection that Amaranth raised to the motion for certification was that its status as a hedge fund should relieve it of the obligation to serve as the representative of a defendant class. The court granted Regal's motion for class certification finding that Amaranth is well-positioned to represent the class as it seeks to advance an interpretation of the calculation provisions of the indenture contrary to Regal's, which affects all noteholders. More ›

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Court of Chancery Awards Attorneys' Fees Only for Work Devoted to Meritorious Claims

In re Triarc Companies, Inc. S'holders Litig., C.A. No. 16700, 2006 WL 903338 (Del. Ch. Mar. 29, 2006). After the voluntary dismissal of a class action, plaintiffs petitioned the Court of Chancery for attorneys' fees and expenses. The court found that plaintiffs' counsel was entitled to fees for the preparation of the amended complaint and litigation efforts undertaken before the action that caused the voluntary dismissal. Plaintiffs' counsel was not entitled to fees for their work in connection with the original complaint nor for their work performed after the claims in the amended complaint were mooted. More ›

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District Court Dismisses Class Action Alleging Federal Securities Laws Violations and State Breach of Fiduciary Duty Claim

Hartman v. Pathmark Stores, Inc., C.A. No. 05-403-JJF, 2006 U.S. Dist. LEXIS 9349 (D. Del. Mar. 8, 2006). Plaintiff filed a class action complaint against defendants, alleging violations of Section 14(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and breach of the fiduciary duty of loyalty by the directors of Pathmark Stores, Inc. ("Pathmark") in connection with a transaction between Pathmark and The Yucaipa Companies, LLC ("Yucaipa"). Plaintiff also moved for appointment as lead plaintiff, with his counsel as lead counsel. Defendants moved to dismiss the complaint. More ›

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Court of Chancery Denies Dismissal Despite Three-Year Failure To Diligently Prosecute Class Action

In re Cencom Cable Income Partners, L.P., C.A. No. 14634-NC, 2006 WL 452775 (Del. Ch. Feb. 16, 2006). This Court of Chancery action arose out of a breach of fiduciary duty claim filed on Oct. 20, 1995. Defendants unsuccessfully moved to dismiss for failure to prosecute under Court of Chancery Rule 41. More › Share

District Court Grants Individual Director's Motion to Dismiss Securities Class Action

In re AstroPower Inc. Securities Litig., C.A. No. 03-260-JJF, 2006 WL 288120 (D. Del. Feb. 7, 2006). Plaintiffs alleged that defendants violated Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 by fraudulently overstating AstroPower's revenue in press releases and in SEC filings, and that, as a result, they had purchased their AstroPower stock at artifically inflated prices. Plaintiffs also alleged that the defendants qualified as "controlling persons", as that term is defined in Section 20 of the Exchange Act, of AstroPower and therefore liable to plaintiffs. Defendant Thomas J. Stiner, a Chief Financial Officer, Senior Vice President and director of AstroPower, moved to dismiss the complaint as to him. More › Share

District Court Allows Plaintiff in Illinois Securities Class Action to Intervene in Delaware Action and Stays Delaware Action in Favor of First-Filed Illinois Action

Hyland v. Harrison, C.A. No. 05-162-JJF, 2006 WL 288247 (D. Del. Feb. 7, 2006). Dr. Stephen Blau, the lead plaintiff in a securities class action pending in the U.S. District Court for the Northern District of Illinois (the "Illinois Action"), moved to intervene in the later-filed present action in Delaware that alleged similar claims against the defendants by the Delaware plaintiffs, after he learned that the Delaware plaintiffs had filed several amici curai briefs seeking to have the Illinois court vacate its order appointing Dr. Blau as lead plaintiff and to transfer the Illinois Action sua sponte to Delaware. Dr. Blau also sought to have the Delaware district court stay the Delaware action in order to allow the first-filed Illinois Action to proceed. More › Share

District Court Dismisses Proposed Insurance Class Action But Grants Leave to Amend Complaint

Eames v. Nationwide Mutual Insurance Co., C.A. No. 04-1324-KAJ, 412 F. Supp. 431 (D. Del. 2006). Plaintiffs filed a proposed class action alleging that defendant Nationwide Mutual Insurance Company ("Nationwide") misrepresented to class members the limits of liability of the Personal Injury Protection ("PIP") coverage that was included in Nationwide's automobile policies. Nationwide moved to dismiss for failure to state a claim. More › Share

Delaware Supreme Court Reverses the Superior Court's Certification of Class in Suit Against Securities Dealers

Wit Capital Group, Inc. v. Benning, No. 568, 2004, 2006 WL 249983 (Del. Jan. 31, 2006). The plaintiffs sued the defendants, Wit Capital Group Inc. and Wit Capital Corporation ("Wit"), securities broker/dealers, alleging that the defendants breached their account agreement by failing to allow the plaintiffs to purchase certain IPO shares. The plaintiffs argued, pursuant to Superior Court Civil Rule 23(b)(3), that common questions of law or fact predominated over questions affecting individual class members. Reversing the Superior Court's decision to certify a class, the Delaware Supreme Court found that the plaintiffs failed to show fact of common injury affecting all plaintiffs. More › Share

District Court Dismisses Potential Securities Fraud Class Action Involving Only Foreign Parties

Blechner v. Daimler-Benz AG, C.A. No. 04-331-JJF, 2006 WL 167835 (D.Del. Jan. 24, 2005). Plaintiffs, on behalf of themselves and other foreign shareholders who invested in securities of DaimlerChrysler AG, filed a class action complaint alleging securities fraud in connection with the merger of Chrysler Corporation and Daimler-Benz AG. Defendants moved to dismiss the complaint. More › Share

Partial Summary Judgment Denied by Court Of Chancery On "Entire Fairness" And Disclosure Grounds

In re Tele-Communications Inc. Shareholders Litig., C.A. No. 16470, 2005 WL 3547674 (Del. Ch. Dec. 21, 2005), opinion revised and superseded by No. CIV. A. 16470, 2005 WL 3642727 (Del. Ch. Dec. 21, 2005), (revised Jan. 10, 2006)(Westlaw citation not available). This summary judgment action originates from a Consolidated Amended Complaint that alleged nondisclosure of material information <and a lack of fairness of the impugned merger transaction. More › Share

Class Representative Awarded Additional Fee Compensation For Shouldering Extra Burden By Court Of Chancery

Raider v. Sunderland, et al., C.A. No. 19357 NC, 2006 WL 75310 (Del. Ch. Jan. 04, 2006) (Revised Jan. 05, 2006). This is a class action involving board actions and fee requests by the plaintiff representative. More › Share

Federal Court Appoints Metzler Group as Lead Plaintiff Under the PSLRA And Fed R. Civ. Pro. 23

In re Molson Coors Brewing Company Securities Litig., 233 F.R.D. 147 (D.Del. Dec. 2, 2005). This Memorandum Order deals with the appointment of lead counsel in three purported class claims for alleged violations of federal securities laws. The actions were consolidated by the Court. The class claims ensued from the 2005 merger and agreement between Molson, Inc., ("Molson"), the third largest brewer in Canada and Adolph Coors Company ("Coors"), the third largest brewer in the U.S., creating the Molson Coors Brewing Company ("Molson Coors"). The Court held that the Metzler Group would act as lead plaintiff and its counsel would be lead counsel. More ›

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The District Court Holds That Group of Investors Led By German Investment Firm was Entitled to Appointment as Lead Plaintiff

In re Molson Coors Brewing Company Securities Litigation, 233 F.R.D. 147 (D.Del., December 02, 2005). In a consolidated securities fraud actions, plaintiffs filed competing motions for appointment of lead plaintiff and approval of selection of lead counsel. More › Share

Entire Fairness Applied to Third-party Merger Transaction Where Controlling Shareholder Acquired Minority Stake in Resulting Company

In re LNR Propert Corp. Shareholders Litigation, C.A. No. 674-N, 2005 WL 3418631 (Del. Ch. Nov. 4, 2005, rev'd Dec. 14, 2005). Former shareholders filed fiduciary class action in connection with a cash-out merger, naming corporation and former directors as defendants. The complaint alleged that the corporation's controlling shareholder negotiated to sell the company to a third-party investment firm in all-cash deal. The complaint further alleged that, as part of the transaction, the controlling shareholder and other members of company management agreed to invest approximately $184 million to acquire a 25% equity stake in the surviving entity. Defendants moved to dismiss for failure to state a claim. More › Share