A familiar fact pattern: ParentCo is the owner and controlling shareholder of SubCo. ParentCo completely controls SubCo. The two companies have the same officers, issue consolidated financial returns, and the profits and losses of SubCo are passed through to ParentCo. ParentCo deliberately keeps SubCo in a cash-starved and undercapitalized state, so SubCo is entirely dependent
Commercial Division Holds Nonsignatories Are Bound By Agreement’s Arbitration Clause
“Read before you sign”, is what we counsel our clients, since we all know that courts will bind one contractually to a signed agreement even if not read. But, what if you never signed the agreement? Can you still be bound by it? In earlier blogs — here and here — we addressed this very
Res Judicata: Avoiding Preclusion Confusion in Derivative Litigation
A few weeks ago, my colleague Sonia Russo blogged about how shareholders seeking to bring successive derivative actions should be wary, since dismissal of a derivative action for failure to allege pre-suit demand or demand futility may have a preclusive effect on a subsequent derivative action based on the same issues. But what if a
Forum Non Conveniens – The Recut Gem of Motions to Dismiss
Foreign cities, thieves, and millions of dollars’ worth of missing diamonds. This may sound like the trailer for this summer’s blockbuster action film, but this story of hustling and heisting comes straight from Swissgem S.A and Genevagem S.A. v M&B Limited, a New York case recently decided by Commercial Division Justice Peter O. 
Sherwood.
New York’s Long-Arm Statute Thwarts Dismissal In International Shareholder Derivative Action
Undoubtedly, unsuspecting foreign corporations may find themselves having business connections in New York and subject to the jurisdiction of New York courts.
This blog post focuses on a recent decision by Hon. Andrew Borrock of the Commercial Division of the New York State Supreme Court for New York County in Matter of Renren, Inc. Derivative
The Virtual Practice of Law Is Becoming More Real Than Virtual
At this point, after nearly three months of practicing law virtually from home, I think it’s fair to say that what was once novel and experimental has become a kind of new norm for the future.
Sure, state courts in New York, including the Commercial Division, have been returning slowly-but-surely to in-person operations over the
First Department Affirms Ruling on Scope of “Insured vs. Insured” Exclusion to D&O Policy, Gives Cause to Consider a Creditor Trust
Disputes over the scope of insurance coverage are common fixtures in the Commercial Division Courts. Earlier this month, the First Department partially affirmed Justice Sherwood’s decision in Westchester Fire Ins. Co. v. Schorsch et al. Considering a matter of first impression in the New York Commercial Division Courts, the decision holds that a D&O policy’s
Class Action Lawsuit Dismissed: Commercial Division Finds Company’s Alleged Misrepresentations and Omissions During Stock Sale Non-Actionable Under Securities Law
Many of us have previously heard the expression that there is a fine line between fact and fiction. In securities law that holds especially true where companies that risk walking the “fine line” in their registration statements and prospectuses could find themselves liable to their stockholders.
In a recent decision, Justice Barry R. Ostrager granted
Commercial Division Denies Pfizer’s Motion To Dismiss, Holds Allergan’s Claims for Defense Costs Are Ripe
It’s back to business as usual for Commercial Division Justice Andrew Borrok, who recently issued a slew of decisions contributing to New York’s robust Commercial Division jurisprudence. In one decision, Allergan Fin., LLC v Pfizer Inc. (2020 NY Slip Op 50422 [U] [Sup Ct, NY County Apr. 13, 2020]), Justice Borrok denied a motion
Res Judicata: Shareholders Get One Bite at the Derivative Suit Apple
When filing a shareholder derivative suit, it
‘s important to get the job done right the first time, as other shareholders may not get a second bite of the proverbial apple.
In Noor v. Mahmood, the Second Department upheld Justice Lawrence Knipel’s Order which granted defendants’ motion for summary judgment, dismissing a shareholder derivative