Practice Areas
Practice Areas

Corporate Risk Management, Stockholder Litigation, and Special Committee Representation

Pepper Hamilton LLP is experienced in representing corporations, venture capital and private equity firms, boards of directors, board committees, and individual officers and directors in investigating and defending against breach of fiduciary duty claims. We defend against all types of fiduciary duty claims, both direct and derivative, in courts throughout the country, and we represent and advise major stockholders, directors and officers about their duties when a fiduciary duty claim is threatened or filed. We work with boards and board committees in internal corporate investigations, and we counsel clients on means to mitigate litigation risk in connection with significant corporate and commercial transactions.

Representative engagements in this area include:

  • obtained defense verdict for venture capital funds and directors of KOR Electronics following three-week trial in which minority stockholders asserted both direct and derivative claims based on preferred stock financing and recapitalization; the case clarified California law with respect to fiduciary duty limitations on the conduct of alleged controlling stockholders, and the ability of a board of directors to retain the benefit of the business judgment rule when transacting with an alleged controlling stockholder group
  • obtained dismissal of all federal and state derivative actions alleging breach of fiduciary duty and federal securities claims against directors and officers of American Tower Corporation after leading the company’s Special Litigation Committee’s investigation of historical stock option-granting
  • represented special litigation committee of board of a publicly traded advertising and media firm in internal investigation of historical stock option granting practices and responses to stockholder demands; following issuance of special litigation committee’s investigative report, no derivative action was filed
  • represented special litigation committee of Clear Channel Communications in evaluating claims asserted in, and the company’s response to, federal and state court derivative litigation claiming breach of fiduciary duty and federal securities fraud with respect to proposed $19 billion buy-out transaction; following the committee’s report, the plaintiffs declined to seek a preliminary injunction to enjoin the transaction, and the cases were dismissed
  • obtained dismissal of a derivative claim against corporate directors relating to bonuses given to management in connection with sale of the company’s three operating divisions
  • obtained dismissal of claims against general partners of venture capital funds, as directors of venture-backed incubator, in action brought by former preferred stockholder asserting breach of fiduciary duty in connection with corporate dissolution and winding-up
  • won dismissal of breach of fiduciary duty and deceptive business practices claims against an investment advisor, and obtained affirmance of that dismissal on appeal in New York
  • obtained dismissal of a derivative action filed against officers and directors for alleged breach of fiduciary duty in allowing company to allegedly misrepresent its ability to meet certain requirements for regulatory approval of new drug
  • conducted internal investigation on behalf of audit committee of a public company regarding allegations made by a whistleblower that the company president made false and misleading statements at an analysts’ conference
  • conducted internal investigation of broker-dealer regarding possible insider trading based on confidential information about the departure of a profitable trading desk
  • conducted internal investigation on behalf of audit committee of a bank regarding alleged insider trading by one or more board members
  • defended directors against a claim that due to self-interest, they had not obtained a sufficiently high price when selling the company’s principal asset
  • obtained dismissal of derivative action challenging board’s adoption of change-in-control agreements and other executive compensation packages as breach of fiduciary duty
  • represented the founder and majority shareholder of a publicly traded technology company in a breach of fiduciary duty action arising from a going-private merger
  • defended a publicly traded bank holding company against shareholder disenfranchisement claims
  • counseled a publicly traded health care corporation on how to respond to an antagonist shareholder’s request for corporate records
  • defended a publicly traded bank holding company against claims seeking to overturn the election results from an annual shareholder’s meeting
  • represented officers and directors in cases involving propriety of “lock up” provisions in acquisition agreements
  • counseled a bank in breach of fiduciary duty claim regarding alleged dividend omission issues following a merger
  • represented a bank in defense of breach of fiduciary duty claims, involving the administration and investment decisions regarding welfare and pension plans.

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