#ZEBRA 2 BANKS ARPS UPDATE#
#ZEBRA 2 BANKS ARPS PROFESSIONAL#

#ZEBRA 2 BANKS ARPS PROFESSIONAL#

1981), the court must (i) вЂњreview the independence of SLC members and consider whether the SLC conducted a good faith investigation of reasonable scope that yielded reasonable bases supporting its conclusions вЂќ and (ii) apply the courtвЂ™s вЂњown business judgment to the facts to determine whether the corporationвЂ™s best interests would be served by dismissing the suit.вЂќ As to the first prong, the court concluded that the SLC members were independent, noting that вЂњone of the three SLC members sat on EPLвЂ™s board at the time of the Block Trade, and none have any financial interest in the transactions at issue.вЂќ The court rejected the plaintiffsвЂ™ challenge to the independence of two of the three members of the SLC, finding that the SLC members had not вЂњprejudgedвЂќ the merits of the litigation because one had served on the board at the time the defendants initially moved to dismiss the claims, and certain alleged professional and personal relationships did not create a material question of fact as to the SLC membersвЂ™ independence. The court explained that under Zapata Corp.

The SLC produced a 377-page report, which attached 408 exhibits and contained nearly 2,500 footnotes, concluding that the information on which the insiders allegedly traded was immaterial and the insiders lacked the scienter to support the claims, and moved to dismiss the complaint. After the Court of Chancery denied the defendantsвЂ™ motion to dismiss the breach of fiduciary duty claims, the company formed a special litigation committee (SLC) to investigate the claims. District Court for the Central District of California and breach of fiduciary duty claims in the Court of Chancery. According to the plaintiffs, after this earnings call but before second quarter results were announced, certain company insiders sold large amounts of stock in a вЂњBlock Trade.вЂќ EPL stockholders asserted insider trading claims in the U.S.

In 2015, EPL held an earnings call during which it announced lowered guidance for the second quarter that allegedly downplayed certain factors that may have led to the decline in guidance. The Court of Chancery granted a motion to dismiss derivative claims filed by a special litigation committee of the El Pollo Loco (EPL) board of directors formed to investigate derivative breach of fiduciary duty claims arising out of alleged insider trading.

Statutes of Repose/Statutes of LimitationsД¬ourt of Chancery Grants Special Litigation CommitteeвЂ™s Motion To Dismiss Derivative Claims Premised on Alleged Insider TradingДiep v.

#ZEBRA 2 BANKS ARPS UPDATE#

This quarterвЂ™s issue of Inside the Courts - An Update From Skadden Securities Litigators includes summaries and associated court opinions of selected cases principally decided in May-August 2021.

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