In re The Trade Desk, Inc. Derivative Litigationdemonstrates the careful analysis the courts will engage in a Rule 23.1 demand futility challenge to assess both director independence and the likelihood of liability for the claims against the directors.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Jaime A. Bartletthttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngJaime A. Bartlett2025-10-20 09:59:472025-10-20 09:59:47Delaware Court of Chancery Dismisses Derivative Challenge to The Trade Desk CEO’s Compensation Award Valued at $819 Million for Lack of Demand Futility
Uncertainty in Section 11 securities litigation has grown following the Supreme Court’s Slack v. Pirani decision and ambiguities in the Private Securities Litigation Reform Act (PSLRA). The PSLRA grants judgment reduction credits when outside directors settle, but its silence on other Section 11 defendants has created confusion that discourages fair and efficient settlements. Although courts often extend judgment reduction credits more broadly, inconsistent interpretations leave litigants uncertain. Amending the PSLRA to provide uniform rules would promote quicker, fairer resolutions and better serve its goal of curbing abusive securities litigation.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2024/10/MN-24015-Enhanced-Scrutiny-Blog-Imagery-Refresh_11.jpg606833Bruce R. Braunhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngBruce R. Braun2025-10-01 09:04:422025-10-01 09:45:09Congress Must Resolve PSLRA Issue For Section 11 Litigants
On July 21, 2025, the California Supreme Court issued a decision in EpicentRX v. Superior Court, reversing a decision by the California Fourth District Court of Appeal that declined to enforce a forum selection clause in a corporation’s certificate of incorporation and bylaws designating the Delaware Court of Chancery as the mandatory forum. As we reported at the time, the Court of Appeal concluded that because the Delaware Court of Chancery, as a court of equity, does not conduct jury trials, the forum selection clause in favor of the Delaware forum ran afoul of California’s “sacred” right to a jury trial and thus was unenforceable. In reversing, the California Supreme Court rejected this reasoning in its entirety, holding that “A forum selection clause is not unenforceable simply because it requires the parties to litigate in a jurisdiction that does not afford civil litigants the same right to trial by jury as litigants in California courts enjoy.” (more…)
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Matthew J. Dolanhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngMatthew J. Dolan2025-09-23 09:02:312025-09-30 12:44:43California Supreme Court Holds Right to Jury Trial Does Not Bar Enforcement of a Delaware Forum Selection Clause
On September 1, 2022, the SEC universal proxy card (UPC) rules took effect, allowing shareholders to freely “mix and match” from among management and dissident nominees in contested director elections. Before the rules’ adoption, their impact on shareholder activism was hotly debated, including in a comment letter to the SEC from our practice. Since they went into effect, judgments (even by us) have too often been anecdotal or based on limited data.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2025/01/MN-24015-Enhanced-Scrutiny-Blog-Imagery-Refresh_15.jpg606833Eric S. Goodwinhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngEric S. Goodwin2025-09-16 09:03:162025-09-30 12:45:04How Three Years of the Universal Proxy Card Rules Have Changed Proxy Contests
Derek Zaba and Kai Liekefett, co-chairs of Sidley’s Shareholder Activism and Corporate Defense practice, discuss the 2025 proxy season and give a shareholder activism outlook for the second half of the year.
In a recent dismissal of all claims in Borsody v. Gibson, the Delaware Court of Chancery grappled with an unusual set of circumstances involving a former director who believed he had been wrongfully removed from a board and prevented from exercising his stock options. Having missed the window for asserting claims against the two officers who allegedly engaged in the wrongful scheme, he instead targeted two new directors who did not join the Board until after the scheme had already been completed.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2025/05/MN-24015-Enhanced-Scrutiny-Blog-Imagery-Refresh_7.jpg606833Heather Benzmiller Sultanianhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngHeather Benzmiller Sultanian2025-08-14 10:06:142025-09-30 12:45:46What Happens With the Former Board, Stays With the Former Board: Delaware Court Dismisses Claims Against Directors for Failing to Investigate Past Misconduct
In a recent post-trial opinion in BBP Holdco, Inc. v. Brunswick Corporation, the Delaware Superior Court addressed an unusual M&A dispute. After a spin off of one of Brunswick’s bowling divisions, the buyers claimed that they had been defrauded not because Brunswick failed to disclose an ongoing regulatory issue, but because Brunswick allegedly failed to disclose enough about the issue, including how it might unfold in the future. The court soundly rejected this theory, holding that Brunswick fulfilled its obligation to fairly disclose the issue in sufficient detail for the buyers to perform their own independent investigation.
https://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.png00Nilofer Umarhttps://ma-litigation.sidley.com/wp-content/uploads/sites/3/2022/08/sidleyLogo-e1643922598198.pngNilofer Umar2025-08-04 10:20:592025-08-08 16:23:17Gutterball Claims: Delaware Court Rejects Contract and Fraud Claims in the Face of Fair Disclosures
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Delaware Court of Chancery Dismisses Derivative Challenge to The Trade Desk CEO’s Compensation Award Valued at $819 Million for Lack of Demand Futility
In re The Trade Desk, Inc. Derivative Litigation demonstrates the careful analysis the courts will engage in a Rule 23.1 demand futility challenge to assess both director independence and the likelihood of liability for the claims against the directors.
(more…)
Jaime A. Bartlett
San Francisco
jbartlett@sidley.com
Madison J. Ferraro
San Francisco
madison.ferraro@sidley.com
Congress Must Resolve PSLRA Issue For Section 11 Litigants
Uncertainty in Section 11 securities litigation has grown following the Supreme Court’s Slack v. Pirani decision and ambiguities in the Private Securities Litigation Reform Act (PSLRA). The PSLRA grants judgment reduction credits when outside directors settle, but its silence on other Section 11 defendants has created confusion that discourages fair and efficient settlements. Although courts often extend judgment reduction credits more broadly, inconsistent interpretations leave litigants uncertain. Amending the PSLRA to provide uniform rules would promote quicker, fairer resolutions and better serve its goal of curbing abusive securities litigation.
(more…)
Bruce R. Braun
Chicago
bbraun@sidley.com
Tommy Hoyt
Chicago
thoyt@sidley.com
California Supreme Court Holds Right to Jury Trial Does Not Bar Enforcement of a Delaware Forum Selection Clause
On July 21, 2025, the California Supreme Court issued a decision in EpicentRX v. Superior Court, reversing a decision by the California Fourth District Court of Appeal that declined to enforce a forum selection clause in a corporation’s certificate of incorporation and bylaws designating the Delaware Court of Chancery as the mandatory forum. As we reported at the time, the Court of Appeal concluded that because the Delaware Court of Chancery, as a court of equity, does not conduct jury trials, the forum selection clause in favor of the Delaware forum ran afoul of California’s “sacred” right to a jury trial and thus was unenforceable. In reversing, the California Supreme Court rejected this reasoning in its entirety, holding that “A forum selection clause is not unenforceable simply because it requires the parties to litigate in a jurisdiction that does not afford civil litigants the same right to trial by jury as litigants in California courts enjoy.” (more…)
Matthew J. Dolan
Palo Alto
mdolan@sidley.com
Jaime A. Bartlett
San Francisco
jbartlett@sidley.com
How Three Years of the Universal Proxy Card Rules Have Changed Proxy Contests
On September 1, 2022, the SEC universal proxy card (UPC) rules took effect, allowing shareholders to freely “mix and match” from among management and dissident nominees in contested director elections. Before the rules’ adoption, their impact on shareholder activism was hotly debated, including in a comment letter to the SEC from our practice. Since they went into effect, judgments (even by us) have too often been anecdotal or based on limited data.
(more…)
Eric S. Goodwin
New York
egoodwin@sidley.com
Kai H.E. Liekefett
New York
kliekefett@sidley.com
Derek Zaba
Palo Alto, New York
dzaba@sidley.com
2025 Proxy Season: Temporary Disruption Amid Structural Shifts in Shareholder Activism
(more…)
Derek Zaba
Palo Alto, New York
dzaba@sidley.com
Kai H.E. Liekefett
New York
kliekefett@sidley.com
What Happens With the Former Board, Stays With the Former Board: Delaware Court Dismisses Claims Against Directors for Failing to Investigate Past Misconduct
In a recent dismissal of all claims in Borsody v. Gibson, the Delaware Court of Chancery grappled with an unusual set of circumstances involving a former director who believed he had been wrongfully removed from a board and prevented from exercising his stock options. Having missed the window for asserting claims against the two officers who allegedly engaged in the wrongful scheme, he instead targeted two new directors who did not join the Board until after the scheme had already been completed.
(more…)
Heather Benzmiller Sultanian
Chicago
hsultanian@sidley.com
Gutterball Claims: Delaware Court Rejects Contract and Fraud Claims in the Face of Fair Disclosures
In a recent post-trial opinion in BBP Holdco, Inc. v. Brunswick Corporation, the Delaware Superior Court addressed an unusual M&A dispute. After a spin off of one of Brunswick’s bowling divisions, the buyers claimed that they had been defrauded not because Brunswick failed to disclose an ongoing regulatory issue, but because Brunswick allegedly failed to disclose enough about the issue, including how it might unfold in the future. The court soundly rejected this theory, holding that Brunswick fulfilled its obligation to fairly disclose the issue in sufficient detail for the buyers to perform their own independent investigation.
(more…)
Nilofer Umar
Chicago
numar@sidley.com
Kendra L. Stead
Chicago
kstead@sidley.com
Heather Benzmiller Sultanian
Chicago
hsultanian@sidley.com
William J. Lawrence
Chicago
bill.lawrence@sidley.com
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