Corporate Governance Litigation
Client and Industry Challenges
Business relationships can undergo significant changes when parties’ interests no longer align or individuals with different goals join an ongoing concern. When business interests diverge, corporate governance issues may arise through derivative lawsuits asserting allegations of breach of fiduciary duty, misrepresentation, self-dealing, minority owner oppression, squeeze out or outright theft. These disputes can be related to mergers and acquisitions, failure to pay distributions or dividends, termination or dissolution of partnership agreements, earn-out disagreements, or they may result from officer elections and demands for action, meetings or records.
Our corporate governance litigation attorneys are deeply experienced in such disputes, enabling us to develop and implement non-litigation and litigation tactics to help clients achieve their goals. The course of action may include working closely with our mergers and acquisition, tax, and white collar and securities colleagues in civil, criminal and administrative proceedings.
We help clients develop non-litigation strategies based on the business’s governing documents and procedures to resolve a dispute or to favorably posture the clients for anticipated litigation. And, if the only solution is to break up the business, our attorneys can help pursue a corporate dissolution.
We handle disputes arising out of the sale or dissolution of a business, such as those regarding valuation, distribution and divestiture, including takeover battles, challenges to mergers and acquisitions and financing transactions, appraisal litigation, proxy contests and other matters related to change of control, such as potential shareholder derivative and breach of fiduciary duty claims and D&O (Directors and Officers) liability. We have also handled disputes involving ownership of closely held businesses, including books and records inspection actions, actions for financial accounting, minority ownership oppression and squeeze-out, and actions involving the appointment of a receiver or involuntary bankruptcy proceedings. Because Snell & Wilmer attorneys practice in almost every area of business law, we can quickly assemble a team to include firm attorneys practicing in tax, corporate and securities, mergers and acquisitions and other related areas to holistically address all of the issues at hand.
- We represented a real estate development company in a two-week jury trial in a minority oppression action initiated by a minority owner of the company who ultimately parted ways with the company.
- We represented a co-owner of a 20-year old business to obtain his buyout from the company that suffered a deadlock in management and lacked essential buyout remedies within its corporate governance documents.
- We represented members of a startup oil and gas company in a case initiated by an expelled member of the startup who asserted civil conspiracy, fraud, breach of fiduciary duty, unjust enrichment, promissory estoppel, breach of contract and interference claims.
- We represented a minority owner of a radio station holding company asserting individual and derivative claims in an action against other members of the company and related affiliates to seek an audit and a buyout.
- We represented a trucking and logistics service provider in a shareholder dispute, including an obtaining an award of summary judgment in U.S. District Court relating to meaning and intent of disputed management and buyout agreements.
- We represented shareholders of related real estate investment and property management companies in the buyout of minority shareholders, the division of liabilities and the transfer of real estate assets arising from a dispute involving management and control, accounting issues, and the intent and meaning of corporate governance agreements.
Directors and Officers Litigation
Our corporate governance litigation attorneys advise companies and their directors and officers through a variety of claims related to both business disputes and dissolution. We have deep experience in matters involving directors and officers liability, including manager liability in limited liability companies. We can assist with allegations of breach of fiduciary duty, alleged violations of federal securities laws and SEC investigations, and shareholder derivative actions, counseling on various litigation strategies for companies, directors and senior executives.
- We defended the president and chief credit officer of a regional bank in civil litigation brought by the FDIC in its role as the receiver in the bank’s failure. Representation involved defense of the FDIC action, a related coverage action and claims for indemnity from the bank’s parent company.
- We represented the CEO/chairman of the Board and the president/director of a failed bank in connection with an investigation and enforcement action by the Office of the Comptroller of the Currency (OCC).
- We represented the former president and chief financial officer of a junior uranium mining company in an action brought by a group of former investors led by the chairman of the Wall Street placement agent responsible for the private placement of the company’s shares with qualified investors.
- We represented the former CEO/chairman, CFO and COO of a company that was engaged in the development of commercial uses for the kenaf plant in a matter involving Chapter 7 bankruptcy protection.
- We represented directors of a publicly traded company in fraud claims brought by a group of former shareholders challenging board approval of a debt-to-equity conversion and reverse stock split.
- We represented officers, directors and shareholders of a corporation in a claim by a former officer, director and shareholder challenging the involuntary forfeiture of his equity in the company.
Mergers and Acquisition Litigation
Proposed mergers and acquisitions are often the subject of lawsuits by shareholders which may center on contested acquisitions, shareholder derivative claims, antitrust claims, hostile takeover and disclosure claims, spin-out and other issues. Our corporate governance litigation team has deep experience in these types of lawsuits and litigation related to pricing and appraisal, process, disclosures, financial analysis, misrepresentation, breach of warranties, change-of-control payments, earn-outs and squeeze-outs, breach of fiduciary duty and government challenges.
- In addition, Snell & Wilmer’s mergers and acquisitions attorneys can often aid clients in avoiding potential litigation by assisting with government and regulatory compliance and fillings, tax issues, acquisition and related agreements, stock option and severance plans, confidentiality agreements and intellectual property asset management.
- We represented a large consumer products company and its board in several shareholder class actions arising from the company’s acquisition by an international Global 500 company.
- We represented a global natural resources company and certain of its officers and directors in two cases involving the proposed acquisition of a minority interest in a related company.
- We represented a national medical company in litigation arising from the company’s acquisition of another medical company.
- We represented a defense and aerospace technology company and its board of directors in connection with litigation arising out of the company’s acquisition by another company.
- We represented a national dental supply company and its board in an action by a hostile suitor to enjoin the company’s planned merger with a third company.
- We represented an engineering firm in an arbitration pursued by a firm it acquired over allegations that the client breached purchase agreement earn-out representations and obligations.
- We represented former officers of an acquired connect play company in a dispute with the robotic, digital technology and immersive entertainment company that acquired it to address allegations of pre-purchase misrepresentations.
- We represented a holding company, two related companies and their principal members, who were involved in the acquisition of business and intellectual property assets, in an action where the sellers alleged breach of contract, negligent misrepresentation, fraud, fraudulent inducement, fraudulent non-disclosure, civil theft and intentional interference.
- We represented a physical fitness holding company, two affiliated companies and their principal owners, who were involved in the acquisition of business and intellectual property assets, in an action pursued by the sellers alleging breach of contract, negligent misrepresentation, fraud, fraudulent inducement, fraudulent non-disclosure, civil theft and intentional interference.
Often, when potential corporate governance litigation looms, the first step is conducting a thorough and impartial internal investigation into all aspects of sensitive matters related to alleged wrongdoing within an organization. Snell & Wilmer attorneys are highly qualified to conduct such investigations whether necessitated by federal and state criminal and regulatory enforcement actions, or as part of a conflict between business partners or during a business dissolution.
- We represented the board of directors of a public healthcare company in connection with an anonymous complaint that alleged wrongdoing by senior management. The resulting investigation involved non-U.S. issues and corporate structural changes.
- We represented a public technology company in connection with investigating a potential eight-figure financial restatement.
- We represented a special committee of the board of directors of a public pharmaceutical company in conducting an investigation into allegation of stock option backdating.
- We represented a public company to conduct an expedited investigation of alleged improper business transaction involving a relative of senior management.
- We represented several former high-level officers of a public information technology company in connection with an internal investigation into allegations of stock option backdating as well as representation of the same former officers in related shareholder derivative litigation.
Clients We Serve
We serve corporations, partnerships, limited liability companies, public and privately held companies, associations, non-profit organizations, boards of directors, general partners, managing members, as well as individual officers and directors, owners, partners, members and shareholders across industries and across the U.S.
Why Clients Select Us
Our attorneys have the experience to use non-judicial and judicial tactics to assist clients in addressing corporate governance disputes, identifying and avoiding potential obstacles that could come into play. Given the breadth of Snell & Wilmer’s commercial practices, our attorneys have handled challenges to mergers, acquisitions and financing transactions, as well as post-transaction disputes. We help clients analyze their concerns and customize a strategy to a client’s unique situation, including going to trial or helping our client divest themselves from a business relationship. Snell & Wilmer’s corporate governance litigation practice group includes highly seasoned attorneys who understand both the broad needs that such litigation can present and the nuances that must be attended to as part of both non-litigation and litigation approaches. We work cooperatively with other key stakeholders such as auditors, financial and accounting professionals and investors. In addition, our broad jurisdictional footprint enables us to represent clients throughout the United States.