Paul, Weiss is widely recognized as having one of the nation’s preeminent securities litigation and regulatory practices. For two decades, our lawyers have guided global corporations and financial institutions through a series of “bet-the-company” securities-related crises, consistently reducing or eliminating their most damaging claims and negotiating favorable resolutions.
ADT Directors Win Dismissal of Derivative Lawsuit
- Client News
- May 6, 2016
Practices
The Delaware Court of Chancery dismissed a derivative lawsuit against the directors and a former officer of Paul, Weiss client The ADT Corporation. The complaint alleged that ADT's directors breached their fiduciary duties by appointing a representative of a 5 percent shareholder to ADT's board and engaging in a stock repurchase program similar to one that the 5 percent shareholder had advocated, and then repurchasing the 5 percent shareholder's stock a few months before ADT reported disappointing earnings. The plaintiff alleged that demand was excused because ADT's directors had been motivated to entrench themselves in office and therefore had a self-interest in the transactions. The Court of Chancery rejected the plaintiff's claim of demand futility, ruling that the plaintiff's factual allegations were "nearly identical" to those set forth in a prior derivative action the Court of Chancery had dismissed in April 2015, a ruling that the Delaware Supreme Court had affirmed in November 2015. Paul, Weiss represented ADT and its directors in the prior action as well.
The Paul, Weiss team included, among others, litigation partner Daniel Kramer and counsel Robert Kravitz.