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Litigation

: Delaware Business Litigation Report

Court Of Chancery Clarifies Rules On Class Action For Fraud Claims

By Edward M. McNally

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Dubroff v. Wren Holdings LLC, C.A. 3940-VCN (August 20, 2010)

This decision clarifies when a class action may be brought arising out of a claim based on the duty of disclosure.  Briefly, when there was no request for the stockholders to vote [such as when they just receive notice of a completed corporate action], then a plaintiff must prove "reliance, loss causation and damages."   As those elements of the claim may vary for each individual plaintiff, a class action is inappropriate.  Delaware does not recognize the "fraud on the market" theory in those instances.

Full post as published by Delaware Business Litigation Report on August 20, 2010 (boomark / email).

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