Maryland Fiduciary Duty Breach Preferred Stock Holders Lawyers Attorney
MARYLAND CASE FOR BUSINESS LITIGATION
Facts:
Plaintiff, a Delaware limited partnership (LP), filed suit against defendant, a Maryland corporation (MC) and some of its officers and directors. The LP owned public preferred stock in the MC. It claimed that it was owed dividends on its stock, and asserted claims that management and control of the MC were directed towards benefiting the common stock holders at the expense of the preferred stock holders. After investigating the matter through two special litigation committees (SLC), the MC concluded that there was no evidence to support the LP’s derivative claims, which alleged breaches of fiduciary duties by the MC officers and directors. The LP filed suit against defendant alleging in multiple claims that the LP was due accrued and unpaid dividends on its stock. The MC filed a motion under Md. R. 2-502 to dismiss the LP’s derivative claims based on the business judgment rule under Md. Code Ann., Corp. & Ass’ns § 2-405.1 (2007).
Issue:
Whether this Court should defer to the business judgment of defendant’s board and dismiss plaintiffs’ derivative claims without a trial on their merits and are the findings and conclusion of the 2nd SLC reasonable?
Discussion:
At the completion of the two hearings conducted on the motion, this Court had before it the 2nd SLC’s Revised Report of July 20, 2007 (41 pages in length), and Revised Conclusions (4 pages in length), as well as twenty-five document exhibits appended to the Revised Report and Conclusions. Additionally, the record was composed of all pleadings previously filed in the litigation which were relevant to the issues posed by the present motion; all hearing exhibits pertaining to the work of the 1st and 2nd SLCs, correspondence, handwritten notes of members, witness interview lists, memoranda and notes of the 1st and 2nd SLC, meeting minutes, seven prior draft 1st SLC Reports and one interim 1st SLC Report to the board, the 2nd SLC Revised Report and Conclusions; deposition transcripts and dvd’s, internal defendant’s documents including Amended and Restated Bylaws, the Certificates of Resolution, a list of committee members and their powers and duties, draft minutes of meetings of the board of directors, Transaction Committee meeting minutes, salary schedule of defendants; Forms 10-Q, 10-K and 8-K; defendant’s draft proxy agreements, board meeting agenda and minutes defendant’s corporation’s Certificate of Resolutions and ubIQuity.com unanimous written consents regarding defendant; deposition and various correspondence in e-mail, letter and fax form among and between the parties. This court initially noted that the LP bore the burden of proof on the issues of independence, good faith, and reasonableness with respect to a determination under the business judgment rule pursuant to § 2-405.1. It found no evidence that the SLC members were biased. Rather, the court determined that the members of the SLC and their legal advisors acted independently and in a disinterested manner, and that they performed their duties in good faith. Further, this court found that the SLC undertook a reasonable investigation of the derivative claims, and that the SLC’s findings and conclusions were reasonable.
Conclusion:
This court hence dismissed the LP’s derivative claims with prejudice.
Disclaimer:
These summaries are provided by the SRIS Law Group. They represent the firm’s unofficial views of the Justices’ opinions. The original opinions should be consulted for their authoritative content
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Business Litigation in Virginia and Maryland
When business disputes, whether between two businesses or between a business and a private individual, cannot be resolved through negotiation, the commencement of business litigation by filing suit is sometimes the only remaining remedy. Examples of business litigation include the following:
-contractual disputes between businesses, between a business and a customer, or between a business and its employee or contractor;
-a breach of fiduciary duty between business partners or shareholders in closely held corporations. If one member violates his obligation to operate in good faith and loyalty then other partners can recover with business litigation;
-litigation over the infringement of a patent, trademark or copyright; and
-wrongful denial of a commercial insurance claim. If a commercial insurance company undervalues or denies a fair claim then a business can sue to recover the amount to which it is entitled in business litigation.
A good business litigation attorney can be invaluable in protecting your rights and your company’s business interests.
The costs of litigation and the possibility of paying a judgment can threaten the viability of any business. At the same time, any business can find itself unpaid for work on a contract, under-served by a contractor, or damaged by faulty work to such an extent that litigation is the only alternative.
The experienced Virginia and Maryland business litigation lawyers of the SRIS Law Group, P.C. stand ready to institute and pursue lawsuits on your company’s behalf, or to defend your company against suit by another. If your company needs assistance in Federal or State court litigation, from commencing suit to conducting discovery and depositions, filing and arguing motions, to civil jury trials, the SRIS Law Group, P.C. will assist with zealous advocacy to protect your company’s rights under the law.
The Virginia & Maryland business litigation attorneys of the SRIS Law Group, P.C. are all experienced trial lawyers who will prepare to take your case to trial if necessary.
The Virginia & Maryland business litigation attorneys at the SRIS Law Group, P.C. are skilled negotiators knowledgeable in the law applicable to business litigation. They will work to achieve an agreed-upon settlement before trial for you wherever a favorable outcome is possible.
The SRIS Law Group, P.C. is particularly effective at proactively assisting its business clients. One effective way to prevail in litigation is to draft and use in the ordinary course of business certain standard terms and conditions of service that assure a successful outcome or keep you out of litigation entirely. Based on their extensive experience in drafting terms and conditions, reviewing contracts, and in litigating commercial disputes, the Virginia & Maryland business litigation attorneys of the SRIS Law Group, P.C. can assist your company in drafting business terms, and can review documents which are presented to you for signature before you sign away your company’s rights.
VIRGINIA CASE FOR BUSINESS LITIGATION
Facts:
In a previous action, plaintiffs, who held a minority interest in a cellular telephone company, filed two lawsuits against defendant, the managing general partner, alleging that it was guilty of improper and fraudulent acts. Those suits were settled, and plaintiffs assigned their interests to defendant and signed a general release. Subsequently, plaintiffs filed another action against defendant, contending that the release should be set aside, alleging that defendant’s failure to disclose the fact that it was negotiating to sell plaintiffs’ interest for a higher price during settlement negotiations was fraudulent.
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MARYLAND CASE FOR BUSINESS LITIGATION
Facts:
Plaintiff, a Delaware limited partnership (LP), filed suit against defendant, a Maryland corporation (MC) and some of its officers and directors. The LP owned public preferred stock in the MC. It claimed that it was owed dividends on its stock, and asserted claims that management and control of the MC were directed towards benefiting the common stock holders at the expense of the preferred stock holders.
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