Practice Main Contacts

George W. Bramblett Jr.
+1 214.651.5574

Nicholas Even
+1 214.651.5045

Carrie L. Huff
+1 214.651.5509

Odean L. Volker
+1 713.547.2036

Thad Behrens
+1 214.651.5668

Patrick D. Keating
+1 214.651.5369

In the News

Haynes and Boone in Law360: Chancery Tosses Claims Over $100M Sanchez Energy Deal

A Delaware Chancery judge on Tuesday threw out derivative claims that Sanchez Energy Corp. overpaid in an allegedly inside $100 million deal for oil and gas rights to the Tuscaloosa Marine Shale, ruling the suing shareholders didn’t make a pre-suit demand on the board nor show why they couldn’t. >>

Shareholder Derivative Actions

Attorneys in the firm’s Securities Class Action Defense and Shareholder Litigation Practice Group have extensive experience representing corporations, officers, directors, and other parties in connection with shareholder derivative litigation. Derivative suits are brought by a shareholder seeking to stand in the shoes of the company to assert a claim against officers, directors and others for breaches of fiduciary duty or other alleged harm to the company, including: excessive officer compensation, disclosure violations, option plan violations, inappropriate related party transactions, misappropriation of corporate opportunities, or corporate waste. In addition to representing defendant parties, we have also represented special litigation committees of boards appointed to assess shareholder demands and derivative suits.

States have differing pre-requisites for permitting a shareholder to pursue a claim derivatively on behalf of a corporation. Texas has a statutory requirement that a shareholder must first present written demand to a Texas corporation, with no exceptions, and also requires the shareholder to wait 90 days after the demand before filing suit, absent an express rejection or imminent irreparable harm. Delaware, on the other hand, requires a pre-suit demand for Delaware corporations but demand may be excused upon a showing that the corporation’s directors are not sufficiently independent to evaluate a demand. Our attorneys know how to attack failures to comply with applicable pre-suit demand requirements. In 2009, we achieved a significant victory in the Texas Supreme Court, obtaining a unanimous ruling from that court upholding and interpreting the mandatory demand requirement for Texas corporations – the first ruling by the Texas Supreme Court on that statutory provision.

In many instances, derivative suits accompany simultaneously pending securities class actions. These derivative actions are generally pursued by plaintiffs’ counsel other than those appearing in the class action, but there is substantial overlap in factual allegations. Because these derivative suits are not subject to the automatic discovery stay provisions applicable during the dismissal stage in federal securities class actions, they pose additional risks for parties defending against allegations in multiple forums. Our attorneys have extensive experiencing in preventing these “copy-cat” suits from adversely impacting the clients’ interests in other pending proceedings.