Derivative litigation allows you – the shareholder – to step into the shoes of the corporation to remedy misconduct by the company’s officers and directors.
Through our successful representation of clients in numerous derivative litigations, we have recovered millions of dollars for corporations damaged by the misconduct of their directors and officers. We have not only remedied financial damages caused to those companies, but have also caused them to install effective internal control systems, and enact corporate governance reforms to prevent the misconduct from recurring. Our high profile successes include:
• Freddie Mac Derivative Litigation (United States District Court for the Southern District of New York). Freddie Mac announced one of the largest financial restatements in United States corporate history. Through our tireless efforts over several years of litigation, approximately $100 million was recovered for the Company and significant internal control and corporate governance reforms were adopted.
• In re Marsh & McLennan Companies, Inc. Derivative Litigation (Delaware Court of Chancery). Marsh & McLennan was implicated in in a bid-rigging and business-steering scheme. Our efforts through years of litigation led to securing the payment of $205 million to the Company, as well as the imposition of substantial internal control and corporate governance reforms.
• In re: LifeLock, Inc. Derivative Litigation (Arizona Superior Court). Negotiated substantial internal control and corporate governance reforms designed to prevent further damage to theCompany through its alleged violation of a Court Order and its unfair and deceptive conduct directed toward consumers.
• In re FirstEnergy Shareholder Derivative Litigation (United States District Court for the Southern District of Ohio). In the wake of the nation’s largest power outage and the closure of the Company’s nuclear facility resulting from mismanagement and oversight failings, we recouped $25 million for the Company and caused it to substantially improve its management and oversight systems.
Although you may own stock in a company, do you really have a say when a company you own agrees to be acquired? An M&A lawsuit gives you a seat at the table during the deal process. The directors and management have an informational and financial advantage over the public shareholders but an M&A class action helps level the playing field. WeissLaw has a national reputation for regularly challenging mergers and acquisitions that arise from an unfair process or result in an unfair price paid to shareholders.
In general, the Board of Directors and management of public companies have a duty (a.k.a. a “fiduciary duty”) to conduct business in a way that will increase the value of the company and is otherwise in your (the shareholder’s) best interests. However, directors and managers often breach their fiduciary duties and your rights can be impaired in an M&A situation if: An unfair price is offered for your company; Corporate funds were improperly used to pay personal obligations; Barriers are erected to block other possible suitors; Insiders and interested parties get “sweetheart” deals; Assets are moved away from the business; or the directors and management fail to offer full and fair disclosures of all material facts, such as the merger terms, its economic and financial impact, and how the company’s insiders may benefit.
You take a risk when you buy shares of stock, but one risk that you should never have to assume is that the Company or its officers are lying about the Company’s financial condition or business prospects. When corporations misrepresent the facts, innocent stockholders see the value of their investment plummet. We litigate securities fraud class action lawsuits on behalf of deceived investors to recover the damages caused to them.
Our notable successes include:Spahn v. Edward D. Jones & Co. (United States District Court for the Eastern District of Missouri). We recovered $127.5 million for the class.Bachman, et al., v. A.G. Edwards, Inc. (22nd Judicial Circuit Courtt, St. Louis, Mo). A recovery totaling $60 million was obtained for the class.
Levitan v. McCoy (Unite States District Court for the Northern District of Illinois). We recovered about $40 million for stockholders.