Delaware law; shareholder rights plans

Article Abstract:

Two key 1997 rulings by the Delaware Court of Chancery concerned takeover defenses. In re Fredericks's of Hollywood, Inc. Shareholders Litigation concerned directors' conduct of a bidding contest, with shareholders alleging that directors breached their fiduciary duty to the class. Carmody v. Toll Bros., Inc. concerned a "continuing director" provision of a stockholder rights plan. This provision in a shareholder rights plan can only be redeemed by the incumbent directors who adopted the plan or by their successors, and plaintiffs charged that it violated the Delaware General Corporation Law.

Stockholders, Delaware, Corporate anti-takeover measures, Antitakeover strategies

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Court focuses on fiduciary exception to privilege; recent ERISA case sets some parameters for this exception to the attorney-client privilege

Article Abstract:

The United States Court of Appeals for the 2d Circuit ruled in In re Long Island Lighting Co. (LILCO) that plan participants can, in spite of the attorney-client privilege, see legal advice obtained by a fiduciary to aid it in plan administration. The court found, however, that an employer's use of the attorney-client privilege against plan participants turned on whether or not the communication was about a matter on which the employer owed a fiduciary obligation to the beneficiaries. Having the same lawyer for fiduciary and nonfiduciary matters did not waive privilege for all documents.

Confidential communications, Attorney-client privilege, Duty of care (Law)

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The 9th Circuit has held that investment bankers may have professional and fiduciary duties that are broader than those enumerated in their contracts

Article Abstract:

The 9th US Circuit Court of Appeals' decision in 'In re Daisy Systems Corp v Bear Stearns & Co Inc' indicates investment banking firms should consider their qualifications for matters they undertake, and that the term 'exclusive financial adviser' should be used gingerly. The case, arising out of Daisy's bankruptcy, involved Daisy's attempted hostile takeover of another systems- design company, with the aid of Bear Stearns. Courts' interpretation of carefully prepared disclaimers of fiduciary duties remains untested.

Investment advisers

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