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Kahn Swick & Foti

Kahn Swick & Foti represents investors in securities fraud class actions, as well as shareholders and consumers harmed by corporate wrongdoing.

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Corporate Governance And Derivative Litigation

Home»Practice Areas»Corporate Governance And Derivative Litigation

Kahn Swick & Foti prosecutes shareholder derivative suits in state and federal courts when corporate boards breach their fiduciary duties owed to the company. These actions encompass the business judgment rule, corporate waste, executive compensation, failing to disclose non-arm length transactions between insiders and the company, and other corporate governance matters.

CURRENT CASES

  • In re Bed Bath & Beyond Inc. Stockholder Derivative Action, Index No. 516051/2020
    New York Supreme Court, Kings County
    Co-Lead Counsel
  • In re Cabot Oil & Gas Corp. Derivative Litigation, No. 21- 02046
    Southern District of Texas
    Additional Plaintiffs’ Counsel
  • In re Conduent Inc. Stockholder Derivative Litigation, Lead Case No. 650903/2021
    New York Supreme Court, New York County
    Co-Lead Counsel
  • Dalton v. Surgner, et al. (Altria Group Inc. Derivative Litigation), No. CL21-5548-00
    Circuit Court for Henrico County, Virginia
    Plaintiffs’ Counsel
  • Khoury v. Williams, et al. (Groupon, Inc. Derivative Litigation), C.A. No. 2022-0077
    Delaware Court of Chancery
    Plaintiffs’ Counsel
  • Lyon v. AMC Entertainment Holdings, Inc., et al., No. 21-7940
    Southern District of New York
    Plaintiffs’ Counsel
  • In re Mattel, Inc. Stockholder Derivative Litigation, No. 2021-0417
    Delaware Court of Chancery
    Co-Lead Counsel
  • Price, et al. v. Michas, et al. (BorgWarner Inc. Derivative Litigation), No. 2022-11131
    Eastern District of Michigan
    Co-Lead Counsel
  • Pfenning v. Jacobs, et al. (Acadia Healthcare Company, Inc. Derivative Litigation), C.A. No. 2020-0915
    Delaware Court of Chancery
    Plaintiff’s Counsel
  • In re ProAssurance Corp. Stockholder Derivative Litigation, No. 2022-0034
    Delaware Court of Chancery
    Co-Lead Counsel
  • Weber, et al. v. Polk, et al. (Newell Brands, Inc. Derivative Litigation), C.A. No. 20-cv-01792
    District of Delaware
    Plaintiffs’ Counsel

RECENT RECOVERIES

Orrego v. Lefkofsky (Groupon, Inc. Derivative Litigation), No. 12 CH 12420 (Ill. Cir. Ct, Cook Cnty., Ch. Div.). KSF acted as Co-Lead Counsel in the consolidated shareholder derivative action filed in the Chancery Division of the Cook County Circuit Court in Illinois, which was brought derivatively on behalf of Groupon, Inc. against certain of its current and former directors and officers for allegedly breaching their fiduciary duties by, among other things, causing Groupon to issue or make materially false and misleading statements and failing to implement necessary controls over Groupon’s accounting function. KSF facilitated a settlement comprising of comprehensive corporate governance reforms with an estimated value of $159 million, including changes to the Compensation Committee Charter, implementation of director education requirements, enhanced Independent Director meeting obligations, augmentations to the Audit Committee and Disclosure Committee rules and procedures, creation of a new Director of Compliance position, and the retention of an independent auditing firm to conduct an assessment of the company’s internal audit department.

In re Bank of America Corp. Securities, Derivative, and Employment Retirement Income Security Act (ERISA) Litigation, 09 Civ.580 (DC) (S.D.N.Y.). KSF served as court appointed Co-Lead Counsel in the Southern District of New York, and sued current and former executive officers and directors of the company, on behalf of shareholders.  The substance of this action focused on Bank of America’s January 1, 2009, acquisition of Merrill Lynch & Co., Inc. in a stock-for-stock transaction.  This action alleged, among other things, that certain material information was omitted from the proxy statement filed with the Securities and Exchange Commission and mailed to stockholders on November 3, 2008.  This proxy was critical in allowing defendants to obtain shareholder consent for the issuance of shares necessary to consummate the Merger.   KSF was successful in resolving this action after defeating motions to dismiss by multiple defendants.  In addition to major corporate governance reforms, KSF was also able to recover over $62.5 million for the company.

Bassett Family Trust v. Costolo, et al. (Twitter, Inc. Derivative Litigation), C.A. No. 2019-0806 (Del. Ch.).  As counsel for the plaintiff in this demand wrongfully-refused shareholder derivative action, KSF brought breach of fiduciary claims derivatively on behalf of Twitter, Inc. (“Twitter”) against certain of its current and former directors and officers for breaches of duties involving false and misleading statements about Twitter’s user engagement and growth and for insider trading. Plaintiffs were able to secure a settlement providing that Twitter’s board of directors will pay $38 million in cash to Twitter. Twitter’s board will also adopt a series of corporate governance reforms, which include (among other things): (i) enhanced board independence and oversight reforms, including amendments to the charters for the Disclosure Committee and the Audit Committee; (ii) enhancements to oversight of corporate strategy and risk, internal controls, and disclosures, including the creation of the Independent Chief Compliance Officer; and (iii) enhancements to corporate policies regarding compliance training, compensation, insider trading, and recapture of cash-based incentive compensation.

In re Barnes & Noble Stockholder Derivative Litigation, C.A. No. 4813 (Del. Ch. Ct.). As Co-Lead Counsel in this shareholder derivative action filed in the Court of Chancery of the State of Delaware on behalf of Barnes & Noble, Inc. against certain of its officers and directors, including Chairman Leonard Riggio, related to the company’s 2009 acquisition of Mr. Riggio’s private company Barnes & Noble College Booksellers, Inc., alleging that the purchase price, and the process by which it was agreed to, was not entirely fair to Barnes & Noble, Inc. and harmed shareholders, KSF helped obtain a settlement resulting in the recovery of $29 million for Barnes & Noble, Inc. in the form of reductions to the principal and interest payable to Mr. Riggio.

Weil v. Baker, No. 08-CA-00787-SS (In re ArthroCare Corp. Securities Litigation, No. 08-cv-574) (W.D. Tex.). As Co-Lead Counsel in the consolidated federal derivative action on behalf of ArthroCare Corporation against certain of its officers and directors arising from alleged improprieties in the company’s marketing of spine wands, KSF helped obtain a cash settlement of $8 million, along with important corporate governance changes.

In re Fitbit, Inc. Stockholder Derivative Litigation, Consolidated C.A. No. 2017-0402 (Del. Ch.).  As Co-Lead Counsel in this shareholder derivative action filed in the Court of Chancery of the State of Delaware on behalf of Fitbit, Inc. (“Fitbit”) against certain of its officers and directors, KSF alleged that certain insiders made stock sales in the company’s initial public offering and—after agreeing to release the insiders from lock-up agreements that barred them from trading for 180 days after the initial public offering—an early secondary offering, taking take advantage of an artificially positive market response to Fitbit’s flagship PurePulse heartrate monitoring technology. KSF was successful in resolving this action after defeating the defendants’ motion to dismiss, recovering $5 million for Fitbit.

In re FAB Universal Corporation Shareholder Derivative Litigation, Lead Case, No. 14-cv-687 (S.D.N.Y.). As sole Lead Counsel in this consolidated action, KSF brought breach of fiduciary claims derivatively on behalf of FAB Universal Corporation against certain of its current and former directors and officers.  Claims brought included breaches of duties of loyalty, due care, good faith, independence, candor and full disclosure to shareholders; misappropriation of material, non-public information of the Company by certain individual defendants; and violations of Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder.  The action focused on defendants’ publication of false and misleading statements concerning the Company’s kiosk business in China, and the failure to disclose the issuance of $16.4 million worth of bonds to Chinese investors in April 2013.  KSF obtained a settlement involving numerous corporate governance reforms, including the creation a new Disclosure Committee to put effective procedures and protocols in place and designed to ensure that all of the Company’s public statements are vetted for accuracy, integrity and completeness. KSF was also able to cause the Company to modify the Charter of the Audit Committee to provide that at least one non-executive member of the Audit Committee has general expertise in accounting or financial management.  Modifications were also caused to be made to the Company’s Corporate Governance Committee and to the Company’s Code of Conduct.

In re Fifth Street Finance Corp. Stockholder Litigation, Consolidated C.A. No. 12157 (Del. Ch.). As Co-Lead Counsel in this shareholder derivative action filed in the Delaware Court of Chancery on behalf of Fifth Street Finance Corporation (“FSC”) against certain current and former directors of FSC, its investment advisor, Fifth Street Asset Management Inc. (“FSAM”), and current and former directors and officers of FSAM, KSF alleged that certain FSC and FSAM officers and directors caused FSC to pursue reckless asset growth strategies, to employ aggressive accounting and financial reporting practices, and to pay excessive fees under FSC’s investment advisory agreement with FSAM, in order to inflate the perceived value of FSAM in the lead up to FSAM’s initial public filing. KSF was instrumental in obtaining a settlement consisting of certain changes to FSC’s investment advisory agreement and governance enhancements. The changes to the investment advisory agreement include a waiver by FSAM of fees equal to $10 million and an acknowledgment that plaintiffs were a substantial and remedial factor in the reduction of base management fees from 2% to 1.75%. The governance enhancements include additional Board governance provisions, enhanced policies, practices and procedures regarding FSC’s valuation of its investments, increased disclosure of relevant issues, and increased consultation with outside advisors and independent third parties.

Lowry v. Basile (Violin Memory, Inc. Derivative Litigation), No. 4:13-cv-05768 (N.D. Cal.). As counsel for the plaintiff in this shareholder derivative action, KSF brought breach of fiduciary claims derivatively on behalf of Violin Memory, Inc. against certain of its current and former directors and officers for breaches of duties and waste of corporate assets. The action focused on defendants’ publication of false and misleading statements concerning the Company’s operating results and financial condition and alleged waste of corporate assets by granting outsized compensation to the CEO that was not in line with the performance of the Company. KSF obtained a settlement involving numerous corporate governance reforms, including the formalization of a Disclosure Committee to put effective procedures and protocols in place and designed to ensure that all of the Company’s public statements are vetted for accuracy, integrity and completeness. KSF was also able to cause the Company to modify the Charter of the Compensation Committee to provide that the committee will create annual and long-term performance goals for the CEO, whose compensation will be based on whether those performance goals are achieved. Modifications were also caused to be made to the Company’s Audit Committee and to the Company’s Corporate Governance Guidelines.

In re Moody’s Corporation Shareholder Derivative Litigation, No. 1:08-CV-9323 (S.D.N.Y.). As Lead Counsel for the demand-excused shareholder derivative actions filed on behalf of Moody’s Corporation against current and former executive officers and directors of the company, asserting various claims, including for breach of fiduciary duty, in connection with, inter alai, Moody’s credit ratings on various mortgage-backed securities, KSF helped obtain a settlement in which the settling defendants agreed that Moody’s had implemented or will adopt, enhance and/or maintain certain governance, internal control, risk management and compliance provisions, designed to identify, monitor and address legal, regulatory and internal compliance issues throughout the business and operations of Moody’s Investors Service, Inc., the credit rating agency operating subsidiary of the company.

Primary Sidebar

Current Cases

LifeStance Health Group, Inc. (NasdaqGS: LFST)

CarLotz, Inc. (NasdaqGM: LOTZ)

BBQ Holdings, Inc. (NasdaqGS: BBQ)

Professional Holding Corp. (NasdaqGS: PFHD)

CyberOptics Corporation (NasdaqGM: CYBE)

Global Blood Therapeutics, Inc. (NasdaqGS: GBT)

see more»

KSF News

KSF Defeats Motion to Dismiss in Velodyne Securities Litigation

Notice of Settlement of Borgwarner – Stockholder Derivative Litigation

Material Disclosures Obtained Regarding the Shareholder Vote for Advaxis, Inc.

see more»
 

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Terms & Conditions | Privacy Notice

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The submission of information to Kahn Swick & Foti, LLC (“KSF”) or one of its attorneys does not create, and the receipt of it does not constitute, an attorney-client relationship. This website presents general information about, among other things, KSF, currently pending lawsuits, and on-going investigations, which is not intended to be legal advice, nor should you consider it as such.  Please do not send confidential or sensitive information and/or documents to anyone at the Firm until you have been notified that a formal attorney-client relationship has been established.  Contacting KSF does not, and should not, limit you in any way from seeking legal advice regarding this or any other matter.  By submitting this form, you agree that KSF may contact you about this or other potential matters of interest to investors and consumers.

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Privacy Policy

This privacy notice applies to www.ksfcounsel.com and all other websites on the World Wide Web owned or operated by Kahn Swick & Foti. It explains how we collect, use, process and share personal data we collect about you when you visit this website, including in connection with potential or actual representation of you by Kahn Swick & Foti. This notice is in accordance with European Data Protection laws (including the General Data Protection Regulation, effective May 25, 2018, as well as other country-specific laws that may be applicable).

This website is not intended for children and we do not knowingly collect personal data related to children.

What Information Do We Collect About You?

Personal data includes any information about an individual that could be used to identify them.

Kahn Swick & Foti collects, uses, stores and transfers different kinds of personal information about you, such as:

  • “Contact Data” – includes your work address, email address and telephone numbers;
  • “Identity Data” – including your first name, last name and/or title;
  • “Marketing Data” – including your marketing and communications preferences;
  • “Profile Data” – including information collected when you visit our site, such as the site that referred you to our site, pages you visit, actions you take on the site, and information you provide through the site;
  • “Technical Data” – including information about your internet protocol (IP) address, browser type and version, time zone setting and location, browser plug-in types, operating system and platform, and other technology on the devices you are using; and
  • “Usage Data” – information about how you use our website.

How Do We Collect Information About You?

We collect information about you in the following ways:

  • Direct interactions – You provide us with your Contact Data, Identity Data and Profile Data directly when you visit our website, for example, when you register for an event, subscribe to receive publications, request marketing materials, submit a form, provide feedback, and send us an email message and/or attachments.
  • Automated means – We receive Technical Data automatically by using cookies, server logs and other similar technologies.
  • Third parties or publicly available sources – We receive Technical Data from analytics providers such as Google.

How Will We Use Information We Collect About You?

We will only use your personal data in ways permitted by law, which may or may not include consent, depending on the type of data obtained. Any information you submit to us may be used to communicate with you regarding the matter or case for which you provided the information, as well as to communicate with you regarding unrelated matters or cases.

We take appropriate security measures to protect against unauthorized access to or unauthorized alteration, disclosure or destruction of data. These include internal reviews of our data collection, storage and processing practices, and security measures, including appropriate encryption and physical security measures to guard against unauthorized access to systems where we store personal data.

In circumstances where you provide us with personal information in connection with a matter in which we are representing you, we may share such information with contractors or agents we employ in the course of our investigations or casework with your consent. In doing so, we restrict access to personal data to firm employees, contractors, and agents who need to know that information to process it on our behalf. These individuals are bound by confidentiality obligations and may be subject to discipline, including termination and criminal prosecution, if they fail to meet these obligations. We may also share the personal information if we have a good faith belief that access, use, preservation, or disclosure of such information is reasonably necessary to satisfy any applicable law, regulation, legal process or enforceable governmental request.

Marketing

We aim to provide you with choices regarding the use of your data for marketing purposes. We will not use your personal data to send you marketing materials if you have requested not to receive them.

If you do not wish to receive marketing materials and/or would like to request that we stop processing your personal data for marketing purposes, you may submit a request to info@ksfcounsel.com.

Access to Your Information and Correction

EU residents may have certain rights under European data protection law governing the personal data that Kahn Swick & Foti processes, including:

  • the right to be informed;
  • the right of access;
  • the right to rectification;
  • the right to restrict processing;
  • the right to data portability;
  • the right to object; and
  • rights in relation to automated decision making and profiling.

To exercise these rights with respect to any data provided to Kahn Swick & Foti, please contact us. All requests will be dealt with in accordance with the law.

Your California Privacy Rights

California Civil Code §1798.83 permits our clients who are California residents to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

Cookies

A “cookie” is a piece of data sent from a website and stored on the user’s computer by the user’s web browser while the user is browsing. Cookies are then sent back to the originating website on every subsequent visit, or another website that recognizes that cookie. Cookies are useful because they allow a website to recognize a user’s device, preferences, and to help improve the user’s online experience.

Kahn Swick & Foti uses cookies on its website. The cookie contains a short, unique alphanumeric string that helps us recognize a specific user, which helps us improve the user’s online experience and personalize the site. For example, certain confirmation pages may display the name users provide to us. By using our website, you agree that we can place these types of cookies on your device.

If you prefer not to receive cookies, you can change your browser settings to turn off the use of cookies. If you choose to turn off cookies, it is possible that some areas of the website will not function properly. Please refer to your browser’s Help function for specific information on how to turn off cookies.

Data Retention and Storage

All data collected through this website, including data submitted by you, will be stored in the United States. Please note that, should you wish to submit personal data protected under European data protection law (other than for purposes of responding to your inquiry), you should contact us prior to submitting such data to discuss options.

We will only retain your personal data for as long as necessary to satisfy the purpose for which it was collected. Examples include satisfying legal, regulatory, accounting, reporting requirements and/or executing legal work for which we were retained by you. The specific retention period applicable to the type of data obtained will depend upon a variety of factors, including the data type, purpose for which it was obtained, and the nature, volume and sensitivity of the personal data, among others. If you would like to know more about data retention, please contact us.

Changes to Our Privacy Policy

Kahn Swick & Foti reserves the right to change this policy at any time by posting a new privacy policy at this location.

How to Contact Us

If you have questions concerning this Privacy Notice, wish to obtain additional information, or exercise specific data subject rights pursuant to European law (including the General Data Protection Regulation, and other country-specific data protection laws that may apply), please contact us.

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