Shareholder & Directors & Officers Litigation

Shareholder actions present an increasingly frequent challenge to the boards and officers of both public and closely-held companies. These cases range from mere distractions to fundamental challenges to the integrity of a company’s decision making.

McGuireWoods has deep experience in all aspects of defense of these procedurally complex matters in federal and state courts:

  • We represent the officers and directors who are the targets of claims of breach of fiduciary duty, fraud or misrepresentation.
  • We represent the corporate entity that is a direct target, or the nominal defendant in a shareholder derivative action.
  • We represent special litigation committees of corporate boards that are charged with investigating and reporting on shareholder demands.

McGuireWoods’ trial teams frequently litigate the issue of demand futility, which often presents a significant hurdle to shareholders seeking to seize control of internal matters from management. We also have favorably defended direct actions asserted by shareholders on the ground that the claim was only derivative in nature. In addition, we work to make sure that derivative cases are managed in the most appropriate jurisdiction, and that multiple, duplicative challenges are effectively addressed. Delaware corporate law, which is often applicable in shareholder matters, is well-known to our team.

We fully appreciate the need for great care in maintaining the independence of board special committees that are charged with investigating the actions of fellow board members. Subtle issues of attorney-client privilege and confidentiality frequently emerge in the midst of special litigation committee investigations, and require careful, experienced management.

Direct and shareholder derivative cases rarely arise in isolation. Strategies must be developed and implemented with sharp peripheral vision. We understand the vital need to coordinate in an effective and efficient manner when companion investigations, regulatory proceedings or lawsuits are in play. We have worked on multiple matters that involve parallel civil or criminal proceedings, and grand jury or SEC investigations. We seek to maximize the insurance protection that may be available to clients through D&O policies. 



    Regional agricultural supply cooperative

    Successfully represented a regional agricultural supply cooperative in the defense of allegations that its directors committed ultra vires and oppressive acts against the plaintiff.



    Representation of a former bank official in a band fraud investigation. After a 10-week jury trial, our client was acquitted on all nine charges, while the other four co-defendants were convicted of most charges they faced.


    Fortune 100 financial services institution

    Representation of a Fortune 100 financial services institution in a shareholder derivative action against its directors alleging failure to adequately prepare for and respond to the residential foreclosure crisis.


    Secured dismissal on motions and merits in a shareholder action on behalf of technology client

    Lead hearing and trial counsel for an information technology company in a shareholder action brought by two hedge funds claiming non-payment of more than $100 million in dividends and redemption payments for preferred shares, and seeking monetary relief along with receivership and dissolution of company.


    Insurance company

    Representation of the Special Litigation Committee of the board of directors of an insurance company in its investigation of shareholder derivative claims that attacked the fairness of the company’s merger with another entity and claimed excessive executive compensation.

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