Bloomberg BNA’s Corporate Law & Accountability Report is available on the Corporate Law Resource Center. This news service keeps corporate practitioners informed of legal developments of...
June 20 — A mere “volunteer” shareholder who points out how his or her corporation could benefit from some action is not thereby entitled to attorneys' fees paid by the company, according to a June 20 Delaware Court of Chancery decision .
In Raul v. Astoria Financial Corp., Vice Chancellor Sam Glasscock III granted the defendant's motion to dismiss, finding that only a valid claim merits a fee award and that the claim must assert some actionable wrongdoing, not just a better way to do business.
In 2012, shareholder plaintiff David Raul demanded that Astoria Financial make certain disclosures relating to a May 2011 say-on-pay vote that he said were required by the Securities and Exchange Commission and the Dodd-Frank Wall Street Reform and Consumer Protection Act. The company responded by making further disclosures, but it refused to pay Raul's attorneys' fees related to the demand.
Raul filed suit to collect, but Glasscock held that Raul's pleadings failed to explain which fiduciary duties the Astoria Financial board violated or how they were violated.
Glasscock further noted that “where a volunteer stockholder (or non-stockholder, for that matter) notifies directors, not that they are in breach of their duties, but simply that they have missed a corporate opportunity or should avoid a corporate loss, the consideration of such a notification is a board, not a Court, affair.”
The plaintiff “fails in briefing to articulate the basis of the underlying fiduciary duty claim” asserted in his demand, and a mere showing of wrongdoing is not sufficient to imply a breach of duty, Glasscock concluded.
The opinion is available at http://www.bloomberglaw.com/public/document/Raul_v_Astoria_Fin_Corp_Civil_Action_No_9169VCG_2014_BL_173740_De.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)