Board and Officer Representation

On June 23, 2023, Judge Michael T. Liburdi of the U.S. District Court for the District of Arizona dismissed with prejudice all claims brought against Cravath clients First Solar, Inc. and its executives (collectively, “First Solar”) in a purported securities class action litigation concerning the company’s Series 6 solar module and its Project Development business.

On June 16, 2017, the Delaware Court of Chancery dismissed a stockholder derivative lawsuit brought against current and former directors and officers of Qualcomm Incorporated alleging, among other claims, that defendants breached their fiduciary duties by allegedly failing to prevent purported FCPA violations by the company. In granting the dismissal, Vice Chancellor Tamika R. Montgomery‑Reeves held that the complaint did not plead sufficient facts to infer that the individual defendants had acted in bad faith or that the directors faced a substantial likelihood of personal liability such that plaintiffs’ failure to make a demand on the board to bring a suit was excused.

On May 17, 2011, the United States District Court for the Southern District of New York granted a motion to dismiss shareholder derivative litigation brought against Cravath clients, the Outside Directors of Citigroup Inc. Shareholders alleged breach of fiduciary duty, corporate waste and mismanagement against certain of Citigroup’s current and former directors and officers in connection with Citigroup’s losses on mortgage-backed assets in the second half of 2007.

On March 22, 2011, Judge Elaine Bucklo of the United States District Court for the Northern District of Illinois dismissed with prejudice an amended derivative complaint against Cravath client Huron Consulting Group Inc. and its directors.

On December 17, 2010, the United States District Court for the District of Kansas granted summary judgment in favor of Cravath clients Sprint Nextel Corporation and its outside directors in State of New Jersey v. Sprint Corporation et al., a securities class action that has been pending since 2003. The State of New Jersey asserted claims for securities fraud against Sprint and certain of its former officers and directors under Sections 10(b) and 14(a) of the Securities Exchange Act of 1934. These claims were based on alleged false and misleading statements in Sprint’s 2001 and 2002 proxy statements and other filings; these filings stated that Sprint had entered into new employment agreements with its CEO and President at the time, William Esrey and Ronald LeMay, respectively, that were intended to ensure the long-term employment of the executives. Esrey and LeMay were terminated by Sprint in early 2003, and New Jersey alleged that their terminations were inevitable at the time of the earlier proxy statements because the executives had entered into tax shelters that were not sustainable and would result in devastating tax liabilities, making it impossible for them to continue to lead Sprint.

On May 26, 2022, Cravath partner Gary A. Bornstein participated in “Delaware Law Developments 2022: What All Business Lawyers Need to Know,” a program presented virtually by the Practising Law Institute. Gary spoke on a panel entitled “Fiduciary Litigation,” which discussed recent Delaware Supreme Court decisions, controlling stockholders and control groups, and other recent developments.